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May 01, 2012

Singing the bleaus? Despite raking in the dough, Fontainebleau may still be on the verge of bankruptcy

Despite recent reports of raking in $9 in revenue per second and "leaving financial woes behind," the Fontainebleau may not be able to avoid filing for bankruptcy according to a leaked confidential memo sent out today by Fidelity National Title Group's Florida Underwriting Department to all Florida offices and agents of Chicago Title Insurance Company, Commonwealth Land Title Insurance Company, and Fidelity National Title Insurance Company.

Reads the memo, "You are hereby instructed not to close or process any title insurance transactions without prior written approval of the Underwriting Department in which the following individuals and entities are involved in the transaction: Bruce Weiner, Jackie Soffer, Jeffrey Soffer, and Ray Parello." The Soffers we know. As for Weiner, he's a former Turnberry CEO who has alleged that "Soffer siphoned millions of dollars from Turnberry companies for 'upkeep of his baronial lifestyle,'" while Parello is Turnberry's Director of Finance.

We sent the entire memo to our legal eagle, who, in layman's terms told us, "Sounds like he is going to have to file for bankruptcy. It also sounds like he is not going to be able to obtain title insurance for any of his properties that he either has or is planning to purchase in the future."

This, despite the fact that on April 3, the Herald's Doug Hanks wrote, "The 1,500-room resort that once publicly discussed bankruptcy proceedings now is impressing analysts with rapid profit growth and one of the most lucrative nightclubs in the country."

The Fontainebleau's Director of Public Relations Mabel De Beunza was unavailable for comment.

So were we just bam-bleau-zled (sorry) or is this not that shocking and no big deal? We'll leave that to the business experts like Hanks, who says "I would be cautious in assuming this will impact the Fontainebleau." We won't cry for them, but on second thought, for $9 a second we'll cry them a river.

Click here for the entire memo

The Miami Herald has received a letter from Fidelty National Title Group that takes issue with this posting, stating it "mischaracterized both the Alert's purpose and its contents. ... Fidelity's Alert did not make the assertions suggested in your Article...in fact, we have updated the contents of the Alert to delete both Bruce Weiner and Ray Perello from the list of individuals as to whom underwriting positions must be formulated.''
After reviewing the situation, Miami Herald editors agree that the memorandum attached to the above posting does not present information that would support any conclusions regarding the Fontainebleau's risk of bankruptcy . The lawyer quoted in the post gave a general opinion as to the legal language in the memo and had not followed or studied cases involving the Fontainebleau and its financial standing prior to giving us his quote.