Jul 30, 2008 6:08 pm US/Eastern
Barden Apparently Not Facing Foreclosure Action
PITTSBURGH (KDKA) ―
Some good news for Chicago billionaire Neil Bluhm tonight. Majestic Star casino developer Don Barden does not appear to be the target of any foreclosure actions by his creditors and contractors, many of whom have not been paid since April.
"We had the contractors and subcontractors agree on July 1st to stop working but not to dismantle to their crews -- with the hope and expectation that there would be an approval process and a financing of mr. bluhm and his company in short order," Majestic Star general contractor Dan Keating told a Senate hearing in Harrisburg last Thursday.
But today is the day Bluhm, Barden, and Keating had hoped to have a permanent financing plan in place. They do not because the Gaming Control Board has not yet acted on their request.
"The magic of the July 30th date has more to due with the fact that, contractually, our subcontractors and we as Keating have the right to terminate a contract," Keating told senators last week.
So far it appears that none of the 28 to 30 contractors -- who have not been paid since April -- have terminated their contracts or filed any actions to foreclose on PITG Gaming.
Credit Suisse -- the lender of the $200 million bridge or temporary loan that got the casino project started -- issued this statement: "We continue to work on a permanent financing solution with new and existing lenders."
And sources say that none of the top four contractors owed the most money - Keating Group, Independence Excavating, Sippel Steel and R. W. Sidley -- have taken legal action against Barden.
The reason is that most stand to lose more money in bankruptcy court than with Bluhm and his partners who will see that they get paid in full.
"If this project were to go into bankruptcy, the devastation among the subcontractor community would be extraordinary. We have local Pittsburgh and other statewide contractors who have tremendous dollars that are pending here right now."
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