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Steve Green

Fontainebleau builder says it's protected from paying severance

15 July 2009

LAS VEGAS, Nevada -- Fontainebleau Las Vegas casino-resort builder Turnberry West Construction has not filed for bankruptcy protection -- but it's claiming to be protected from creditors anyway.

That's what one Turnberry executive has told a creditor, according to documents in a newly filed lawsuit.

Former Fontainebleau construction superintendent Carl Sheets sued Turnberry West in Clark County District Court last week, saying that in March it stopped making severance payments required under his separation agreement.

Court papers show Sheets was hired at a salary of $160,000 per year in March 2007 and left Turnberry West's employment in February 2009. Under the separation agreement, he was to be paid $4,394 biweekly for one year.

Fontainebleau and affiliated companies filed for Chapter 11 bankruptcy reorganization last month and that case is pending.

Turnberry West, which did not seek bankruptcy protection, has been sued by at least five subcontractors over allegedly unpaid work at Fontainebleau.

Fontainebleau has not commented on the suits against Turnberry West Construction (TWC), which is controlled by the same Miami company that is developing Fontainebleau. A request for comment was placed with Fontainebleau on Monday concerning the Sheets lawsuit.

In e-mails attached to the lawsuit, Turnberry West and Turnberry Ltd. executive Robert Ambridge told Sheets' attorney John Peter Lee that Turnberry West lacks funds to pay Sheets.

"Since it is a reorganization, not a liquidation, our attorneys expect a period of four to five months for an outcome of the overall case, which will also include a determination of TWC's ongoing role in the building process," Ambridge said in a June 15 e-mail attached to the lawsuit.

"Turnberry West Construction has not been funded by Fontainebleau since February of 2009. We have minimal funds to remain in operation. However, we have applied through Fontainebleau to its bankruptcy court for some interim allowances to remain in place with a minimal staff during the bankruptcy period," the e-mail said.

In a June 29 e-mail, Ambridge said: "TWC is an affiliate of Fontainebleau, currently in a reorganizing bankruptcy proceeding ... Any funding to and expenditure out has to be applied for and accounted for as an essential cost to maintaining the property, including a small core staff for TWC."

"Our attorneys consider TWC to have the same 'stay' defense against legal actions as Fontainebleau," wrote Ambridge, chief executive of Turnberry West Construction and senior vice president, development, at Turnberry Ltd.

"There are no available funds to pay Mr. Sheets right now. We will be glad to apply for a reinstatement of his remaining payments, on an every two-week basis, and see if the court will approve it," he wrote.