Bids are due Friday for the Fontainebleau, but they have to top Carl Icahn’s $156.2 million offer

Bids are due this Friday from anyone interested in buying the bankrupt, partially constructed Fontainebleau resort on the Las Vegas Strip.

Bidders will have to beat Carl Icahn’s $156.2 million to have a shot to own a project that has already soaked up more than $1 billion in construction costs and would take an estimated $1 billion or more to complete.

Qualified bids will be announced on January 19, according to news reports. And if any are received, an auction is scheduled for January 21.

However, contractors and lenders are now engaged in litigation that may drag on for years to determine who will receive the cash proceeds from the bidding and auction process.

Contractors claiming to be owed $467 million for work on the resort had hoped to submit a “credit bid,” with their claims serving as currency, as opposed to a cash bid. But because of uncertainties as to whether lenders or contractors hold first-priority liens on the project, U.S. Bankruptcy Judge A. Jay Cristol rejected their motion.

Once billed as a $2.9 billion megaresort, Fontainebleau owes banks and bondholders $1.67 billion in addition to the $467 million claimed by the contractors.

At the same time, interest in acquiring Fontainebleau has been limited because of difficult economic conditions in the gaming industry and the massive sums of money needed to complete the resort.

Earlier interest in acquiring it was shown by Penn National Gaming and Apollo Global Management, one of the companies that control Harrah's Entertainment.

Icahn, who also controls Las Vegas-based gaming company Tropicana Entertainment, hasn’t disclosed plans for it should he acquire it.