Dubai World Sues MGM Mirage

The partnership between Dubai World and MGM Mirage in the $9.1 billion CityCenter development in Las Vegas hit a snag, with the Persian Gulf emirate accusing the casino giant of mismanagement.

Dubai World, the investment arm of the Dubai government, filed a lawsuit March 23 in Delaware Chancery Court seeking unspecified damages and release from its obligations. The suit claims MGM Mirage has mismanaged the 76-acre project, leading to cost overruns and uncertainty about its future.

The move was reportedly triggered by MGM Mirage’s annual report that hinted the company, which has until May 15 to get its finances straightened out, may have to default on CityCenter loans, which could put the 50/50 partnership in bankruptcy court.

However, Dubai World general counsel George Dalton said his client still wants to complete the project.

“We’re not saying MGM won’t be involved,” Dalton explained. “We’re anxious to work with them, but we need to see them come out of their financial problems.”

Meanwhile, MGM Mirage Senior VP of Public Affairs Alan Feldman said in a statement to the Las Vegas Review-Journal the lawsuit has no merit.

“Dubai World is well aware of our written commitment to meet our funding obligations and that MGM Mirage has available cash to satisfy those obligations. MGM Mirage is ready, willing and able to fund its share of the costs to complete CityCenter,” Feldman said.

He added that MGM Mirage is ready to work out any outstanding issues with Dubai World and complete the project as planned, the paper said.

The development, with its six high-rises and casino, boutique hotels, condos, entertainment and retail mall, still needs another $1.2 billion in financing.