Clash of the Strip: Vegas Construction Suit to Become Big Ticket
We step away from Washington and Louisiana for a moment to explore the outside construction world, and find that a massive lawsuit has recently come up in Delaware.
The Wall Street Journal Law Blog seems to be the first to report on a Complaint filed in the Delaware Counrt of Chancery alleging the breach of joint venture between MGM and Dubai-based Infinity World Development Corp. A copy of the 13 page Complaint can be found at Wall Street Journal’s website.
The suit, initiated by Infinity, alleges that MGM (the shell of wholly-owned affiliates Mirage Resorts and Project CC) has breached a joint venture agreement to develop City Center, a massive Las Vegas epicenter for tourism.
The Complaint states that MGM has issued a recent 10-K statement which illustrates that the massive company can no longer pay its debts as they become due, including a debt to make contributions to the joint venture itself (See Page 2 of Complaint). The business’ failure allegedly will cause substantial and irreparable damage to Infinity World Development, who would have to pick up slack in financing the outlandish project.
Now – Infinity World Development wants out. Significant cost overruns and delays have caused the project to run ashore with problems. Estimates for completion continue to grow with each passing day.
Though the suit concers over $10 billion in open obligations, the Complaint itself is quite simple. Infinity has alleged breach of contract, breach of good faith and fair dealing, and sought declaratory relief for its obligations under contract.
No response has yet been offered by MGM in pleading form. But WSJ.com reports that MGM has already issued a public statement:
MGM fired back on Tuesday, calling the lawsuit “completely without merit.” A spokesman later added that the company “is ready, willing and able to fund its share of the costs to complete CityCenter, including a required payment this week.”
The Wall Street Journal further believes that the suit has all the makings of a giant. The celebrity and capital involved makes this case certain to draw considerable legal attention.
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