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Thu 18 Dec 2014 09:57 AM

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Dubai-owned Las Vegas casino settles $500m lawsuit over defective tower

Work on the Harmon Hotel tower in CityCenter was halted in 2007 when inspectors found serious flaws in its construction

Dubai-owned Las Vegas casino settles $500m lawsuit over defective tower
(Getty Images)

A US judge this week announced CityCenter Holdings, the $8.5 billion Las Vegas casino part owned by Dubai, had settled a long drawn out lawsuit against the contractors involved in a defective 48-storey hotel tower, it was reported.

Just as jury selection was underway in the case, Clark County District Court Judge Elizabeth Gonzalez revealed that casino operator MGM Resorts International, which co-owns CityCenter with Dubai World, the investment arm of the Dubai government, had reached a settlement with six of seven contractors involved in the breach-of-contract legal battle.

While CityCenter opened in December 2009, the lawsuit focused on the half-built Harmon Hotel tower. Construction was halted at the 26th floor in 2007 when inspectors found flaws in the steel reinforcements used in the concrete structure, amidst fears the building was at risk of collapsing if a strong earthquake occurred.

Main contractor Tudor Perini claimed MGM owned it for unpaid bills, while MGM argued the builder should take responsibility for the construction flaws.

The settlement was deemed confidential by both sides, with no admission of liability or fault, Associated Press reported.

However, in a financial filing with the Securities and Exchange Commission, it was revealed CityCenter Holdings was awarded $110 million, in addition to the $85 million it has received in insurance claims.

Tutor Perini was also awarded $153 million from MGM, who had already agreed to cover the cost of the demolition of the defective tower. In total, including damages, the lawsuit was valued at around $500 million.

"I think everyone is happy to put this behind them and move on," MGM’s lawyer Mark Ferrario told reporters.

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