Jeffrey Soffer guaranteed a portion of nearly $300 million in the retail portion of the Fontainebleau Las Vegas project, which is not in bankruptcy protection.
The real estate heir and partner in Aventura's Turnberry Associates backed the loans in order to win lender backing for the $3 billion project. The casino and condominium portion, separate from the retail complex, filed for Chapter 11 bankruptcy protection late Tuesday in Miami.
The guarantees could raise the stakes for Soffer as he and aides try to rescue the Vegas venture he launched shortly after purchasing the Fontainebleau Miami Beach in 2005. An arm of Turnberry, his family's development firm, also signed a $100 million completion guarantee on the project, which is awaiting an injection of $800 million to resume construction.
Soffer could not be reached for comment Wednesday afternoon. A spokesman for Fontainebleau Resorts, the parent company of both hotels, declined to provide details about Soffer's guarantees except to say the personal guarantees were not for the portion of the project currently under bankruptcy protection.
''These are issues that are going to be worked out in bankruptcy court,'' said David Satterfield, the spokesman. ``Jeff is going to work with all the lenders to work out a deal that is as satisfactory as possible''
The court documents say the two loans for the retail portion of the project, with principal balances of $279 million, were ''guaranteed, in part, by Jeffrey Soffer.'' Fontainebleau Resorts also was listed as a guarantor of the loans.
The filing comes just seven months after Soffer and his legendary father, Donald, presided over the reopening of the Fontainebleau Miami Beach following a $500 million renovation. The event marked the rapid escalation of the younger Soffer's profile.
Gossip columns linked him with actress Gwyneth Paltrow during the opening festivities -- Soffer said they were just friends -- and in May he brought celebrity model Elle McPherson as his date to a Miami Beach Chamber of Commerce event.
A race car driver who owns a yacht and travels by private jet, the 41-year-old Soffer spearheaded the acquisition of Miami Beach's most iconic hotel. He promised to bring Vegas opulence to the oceanfront property.
He recruited Glenn Schaeffer, former head of the Mandalay Bay casino, to run his new company, and announced plans to tear down the hotel's infamous ''Spite Wall'' building and replace it with a gleaming tower of glass.
But the boldest move came with Soffer's plan to build a $3 billion Fontainebleau casino on the Vegas strip. The debt was to be repaid with proceeds from selling roughly 2,000 condo-hotel units in the 63-story tower.
There were early hints that the plans were too ambitious. Soffer scrapped the glass tower in favor of adding windows to the Spite Wall, saying the new construction would take too long. More than a year after tapping a Vegas heavyweight as CEO, he turned over operations of the company to Howard Karawan, who used to run another mammoth seaside resort, Nassau's Paradise Island.
And last spring, Soffer sold 50 percent of the Fontainebleau Miami Beach for $375 million to an investment arm of the Dubai government. He then poured $200 million of the proceeds into the Vegas project to cover cost overruns, according to reports from a debt ratings agency and an earlier interview with Karawan.
Construction crews were working both projects simultaneously as a booming economy gave way to a decline, with the Vegas condo market ending up in a depression. That spooked lenders, who cut off funds last month. Fontainebleau Resorts tried to sue for the roughly $800 million in outstanding construction funds and is moving that court fight to Miami.
In filing for Chapter 11 bankruptcy protection, Soffer's team hopes to find a new lender to complete the project, allowing them to open the Fontainebleau Vegas.
They emphasized that while the two projects share a name, they are separate legal entities.
''One of the benefits of filing for bankruptcy is, it sort of isolates the project,'' said Satterfield, the spokesman and a former Miami Herald business editor. ``It allows, for instance, for Fontainebleau Miami to focus on running that resort.''
