Colony Capital to Bail out MGM Mirage? [Updated]

In this age of recession gaming, there's almost no bigger story than MGM Mirage's troubles.  This huge gaming company has halted progress on its $4.5 billion project in Atlantic City and its mega CityCenter project in Las Vegas is struggling along financially.  Major financier Dubai World is trying to separate from the project and MGM Mirage has until May 15 to re-structure its debt on the project based on terms from its primary lender, Bank of America. 

The company is re-evaluating expansion plans, selling off assets n the Strip and otherwise desperately trying to stay ahead of upcoming bond payments.  Its also hoping to borrow $750 million from Colony Capital LLC, according to Bloomberg.

Colony Capital owns Resorts & the Hilton in Atlantic City.  Interesting that Colony may be willing to help bail out MGM Mirage from financial disaster while basically watching Resorts die on the vine as the AC casino's mortgage holder sues to foreclose on the property.  If this deal with MGM Mirage goes through, the only logical conclusion is that Colony's money managers are making a strong statement that Vegas, not AC, is the much-preferred long-term play as far as destination gaming resorts are concerned.      

Update: April 10 - According to Bloomberg, the deal is now off.  Maybe Colony's not writing off AC after all....