MGM Mirage files counterclaim against CityCenter builder

20.05.2010, MGM Mirage says it believes the contractor that built the us$ 8.5 billion CityCenter complex on the Las Vegas Strip owes hundreds of millions of dollars for defective work and mishandled billing that has left many subcontractors unpaid.

In a counterclaim filed Friday against Perini Building Co., the firm said it has begun paying subcontractors despite Perini's contractual obligations to pay them.

Perini officials have said they were supposed to pay the subcontractors after being paid by MGM Mirage. The company also said Perini didn't give a final bill until May 4, after Perini had filed suit in Clark County District Court - and weeks after the contractor told the casino company it intended to file mechanic's liens to collect for its work.

"(The bill) consisted of 140 banker's boxes containing over 300,000 pages of disorganized, allegedly supporting documentation that CityCenter must now organize and analyze to determine how much money, if any, is actually owed to Perini," a lawyer for MGM Mirage wrote in the lawsuit.

MGM Mirage said Perini also overbilled to correct its mistakes at CityCenter, a joint venture owned by MGM Mirage and Dubai World. Other mistakes required work by other contractors, MGM Mirage said.

Craig Shaw, Perini Building's CEO, said in a statement that MGM Mirage's offset claim "has no basis in truth or legal context." "We are confident that at the end of the day - one way or the other - MGM Mirage will be held accountable and required to pay the money it owes the subcontractors and Perini."

MGM Mirage has said problems with improperly spaced reinforcing steel at CityCenter's Harmon Hotel led to the tower being shortened and delayed. It has yet to open, while most of the complex opened in December.

But the casino company said in its claim that Perini also did unsatisfactory work in other parts of CityCenter, including the condominium Veer Towers, the Crystals retail mall, the Aria convention center, the Mandarin Oriental and the complex's central plant.

MGM Mirage said it offered Perini plenty of time to fix its mistakes. "In some instances, Perini repaired the non-conforming work and billed CityCenter for the cost of curing its own defective work," the counterclaim said. "In other instances, Perini was unwilling or unable to correct the non-conforming work and CityCenter was forced to hire other contractors to correct (it)."

MGM Mirage said it has not yet determined how much its claims against Perini are worth, but it estimated hundreds of millions of dollars for costs for investigation, repairs, mitigated losses, attorneys, consultants and experts, lost profits and business opportunities and other losses.

Perini has said the Harmon work is fixable. It plans to meet with Nevada Gov. Jim Gibbons on Friday regarding the lawsuits and it has formed a coalition with subcontractors against MGM Mirage.

Yogonet.com / Yahoo Finance / AP

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