Casino firm makes lowball offer on Fontainebleau Las Vegas

The developer of the bankrupt Fontainebleau Las Vegas is seeking to auction off the unfinished hotel to help resolve its $1 billion tangle of litigation. Penn National Gaming has made an offer of less than $300 million to begin a bidding process for the 3,889-room project, but the lawyer for Fountainebleau did not identify the exact amount. In return for setting the pace with its stalking horse bid, Penn will pay the legal expenses of the bankruptcy fight. Judge Jay Cristol wants to appoint an examiner to hasten the process, and lenders want to transform the proceedings from Chapter 11 reorganization to Chapter 7 liquidation.