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Lawyers Defending the Fontainebleau Miami Beach Against $60 million
 in Construction Claims Drop Out Citing Irreconcilable Differences

By Douglas Hanks, The Miami HeraldMcClatchy-Tribune Regional News

October 2, 2009 --Lawyers defending the Fontainebleau Miami Beach against more than $60 million in construction claims dropped out of the case Thursday as contractors accused the resort of stall tactics amid a lack of cash.

Bilzin Sumberg, a prominent Miami firm, won court permission to drop the dozens of cases against South Florida's largest resort. A judge agreed to delay depositions and mediation until December, Fontainebleau's deadline to find new lawyers.

Fontainebleau executives accuse contractors of submitting padded bills and bogus fees from a renovation funded by a $640 million mortgage on the iconic oceanfront property. Bilzin lawyers declined to say why they were withdrawing, but some contractor attorneys called the move another example of Fontainebleau not paying its bills.

"Basically, I've been getting the run-around," Alexander Cvercko, who represents a construction staffing firm claiming nearly $1 million in unpaid bills, said during the morning hearing in Miami-Dade Civil Court. "The Fontainebleau ran out of money, and just doesn't want to pay people."

David Reimer, a lawyer for Fontainebleau's contractor, said the resort has legitimate disputes with fees and warned against drawing broad conclusions about Bilzin's departure or the unpaid contractors. "There's more to these cases than the Fontainebleau doesn't have the money to pay," Reimer said. "There are questions [to be] raised about these bills."

No Fontainebleau executives attended the hearing, and Bilzin lawyer Michael Kreitzer declined to elaborate beyond the "irreconcilable differences" cited in the firm's motion to withdraw from the case.

Clifford Wolff, who represents Accurate Glass' $550,000 claim against the Fontainebleau, asked Judge Gill Freeman to order the Bilzin lawyers to disclose if a bankruptcy filing was pending.

"I hope all of this work here today isn't for naught, and they run up a bankruptcy petition," the Fort Lauderdale lawyer said. Freeman declined to ask the Bilzin lawyers, saying, "I don't think that's any of our business, quite frankly."

The accusations come as the resort's sister property, the Fontainebleau Las Vegas, fends off creditors in bankruptcy court. Lenders on that unfinished project have asked a judge to liquidate the venture to pay off about $2 billion in construction debt.

Both are run by Jeffrey Soffer and top executives at his family's Aventura real-estate company, Turnberry Associates. Affiliates of Turnberry also served as general contractors on both projects, and Bilzin still represents Fontainebleau Las Vegas in the bankruptcy case.

Lawyers for the Vegas lenders recently accused the corporate parent of both hotels, Fontainebleau Resorts, of shifting some costs from Miami Beach to Vegas, where cash collateral on the project's construction loan funds expenses.

Freeman offered comfort to both sides in the case, suggesting some Fontainebleau complaints were groundless and others had merit. Citing a roof leak that sent water pouring into the Fontainebleau's lobby four months ago, she noted: "I'm reading in the newspaper about ceilings falling in and other issues."

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Copyright (c) 2009, The Miami Herald

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