Penn National has offered less than $300 million for the Fontainebleau

Penn National Gaming could end up owning the Fontainebleau on the Las Vegas Strip for pennies on the dollar.

Publicly traded Penn National, which has no presence in Las Vegas but is one of the largest regional gambling operators in the United States, has offered less than $300 million for the troubled megaresort, which has already eaten up about $2 billion in construction costs and has been sitting half-finished since June under the protection of Chapter 11 of the U.S. Bankruptcy Code. Bank lenders pulled financing for the project earlier this year amid concerns about cost overruns, the economy and a tattered Las Vegas tourism market.

One recent appraisal put the market value of the Fontainebleau at less than $400 million. So Penn’s offer could serve as a “stalking horse,” meaning other bidders could offer more.

“It’s the beginning of a process,” Miami lawyer Scott Baena, representing Fontainebleau developer Jeffrey Soffer, told the Miami Herald.

Creditors are pushing Bankruptcy Judge A. Jay Cristol to shift the case from a Chapter 11 reorganization to a Chapter 7 liquidation through a court-ordered sale. They argue that Soffer, who also owns the Fontainebleau Miami Beach, has too much personal exposure in the project to negotiate a sale that would be fair to the lenders.

Baena said he hopes to present an official deal to Cristol next week, with an auction by the end of the year.