After a two-day trial in Miami, Judge Cecilia M. Altonaga refused to approve a settlement that would bar litigation against directors and officers who allegedly allowed the $2.9 billion Fontainebleau Las Vegas to fail, after expressing doubt in July about the request, which was brought by the U.S. trustee in the bankruptcy. Firm clients are lenders who hold $800 million in debt on the failed Fontainebleau Las Vegas casino project.
The Trustee in the Fontainebleau bankruptcy, who also has claims against the defendants, filed a motion in Florida bankruptcy court seeking to settle around the lenders which would bar $1 billion worth of claims against even nondebtor entities.
