City Center, the $8.6 billion Las Vegas development owned by
and Dubai World, is preparing for a potential bankruptcy filing, the
Wall Street Journal
reports, citing people familiar with the situation.
MGM Mirage, controlled by billionaire investor Kirk Kerkorian, and investment partner Dubai World appear unlikely to make a $220 million payment due Friday on City Center, the massive resort and casino project.
The project has hired law firm Dewey & LeBoeuf to prepare itself for a possible bankruptcy filing, which could come this weekend, the
reports. The filing depends on talks among MGM Mirage, its lenders and Dubai World.
A Dubai World subsidiary filed a lawsuit Monday against MGM Mirage because of worries over the project's viability. The lawsuit claims that MGM Mirage's statements about its financial condition put the project at risk.
Dubai World has signaled it won't provide its half of Friday's payment, according to the
. At the same time, MGM Mirage is struggling to persuade its 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," the
reports, citing a person close to MGM Mirage.
MGM Mirage is struggling under more than $13 billion in debt. It won a waiver from the terms of some of its debt last week, giving it until May 15 to get its finances in shape.