Lender Turmoil Sinking Atlantis

Sol Kerzner

A complex series of events played out behind the scenes in the weeks after Sir Sol Kerzner announced in November the debt-saddled Kerzner International was transferring ownership of its Paradise Island properties to one of its creditors, Brookfield Asset Management, according to a complaint filed recently in a U.S. court by a group of other lenders.

The complaint reveals that Kerzner International sought an extension of its $2.5 billion loan to the end of January while it worked to close its transaction with Brookfield, a Canadian investment group.

All of this was happening amid an escalating squabble over the Kerzner assets, with lenders more senior to Brookfield claiming that its agreement with Kerzner would violate various existing loan agreements and put them (the senior lenders) at a disadvantage.

The lawsuit filed in a Delaware court has left Atlantis and The One&Only Ocean Club hanging in the balance, and has fueled even greater uncertainty over the approximately 8,000 jobs on Paradise Island.