CityCenter, the still-under-construction megaresort on the Las Vegas Strip, faces mounting challenges in reaching completion. The project, touted as the nation’s largest privately funded development, has tried unsuccessfully for months to obtain a $1.2-billion loan to finance the final leg of construction. Now its partners are fighting in court.

The $9.2-billion CityCenter, which includes 19 million sq ft of hotels, homes and entertainment space, broke ground three years ago. On March 23, project partner Dubai World, a conglomerate owned by the Dubai government, sued developer MGM Mirage in Delaware Chancery Court. The timing couldn’t be worse: MGM Mirage is cash-strapped and struggling under a $13-billion debt load. On March 17, it reported a $1.15-billion fourth-quarter loss amid a 17% drop in gaming receipts and a 21% room-occupancy decline. It also has $1.2 billion in bond payments due later this year and $650 million in interest payments.

Dubai World’s suit sent signals that it probably won’t make a $100-million progress payment on City­Center due on March 27. Failure to do so could imperil the job and result in work stoppage by general contractor Perini Building Co., a unit of Perini Corp., Framingham, Mass.

Dubai World seeks unspecified damages. It bought a 50% stake in CityCenter but blames MGM Mirage for project mismanagement and $2 billion in cost overruns, despite the project being scaled back. The suit is “completely without merit,” says MGM Mirage.