[...]The $8.6 billion Las Vegas development owned by MGM Mirage and DubaiWorld, is preparing for a potential bankruptcy filing that could bring the massive project to a halt, according to people familiar with the situation.

MGM Mirage and investment partner Dubai World appear unlikely to make a $220 million payment due Friday on City Center — a massive resort and casino project under construction on 67 acres. City Center has hired Dewey & LeBoeuf to prepare itself for a possible bankruptcy filing, and the firm’s Martin Bienenstock, a noted bankruptcy attorney, is handling the work, according to people familiar with matter. The law firm of Weil, Gotshal & Manges LLP is working for MGM Mirage on a range of legal issues, according to these people.

MGM Mirage

A filing could come this weekend, depending on talks among MGM Mirage, its lenders and Dubai World, these people said. There is a possibility that any filing for court-protection could be averted if the talks lead to an agreement.

Dubai World, a conglomerate owned by the government of Dubai, has sued MGM Mirage for breach of contract and blamed it for cost overruns. It also signaled it won’t provide its half of Friday’s payment. MGM Mirage, meanwhile, is struggling to persuade its reluctant lenders to allow it to solely fund the project. While talks between MGM Mirage and Dubai World were ongoing Thursday night, there “may be no choice” but for City Center to file bankruptcy “if Dubai World doesn’t fund,” said a person close to MGM Mirage.

The casino company faces a cash crunch as it tries to meet obligations on more than $13 billion in debt. The company narrowly averted defaulting on loans last week and warned that it could default by mid-May.[...]

[...]Missing Friday’s payment would start the clock ticking on City Center’s future. Work could grind to a halt within days, idling 8,500 construction jobs, said a person familiar with the talks between MGM Mirage and Dubai World. A delayed opening would also risk the jobs of 12,000 workers who are to staff the complex.[...]

Source: WSJ