Schwarzenegger terminates Planet Hollywood ties

Wednesday, Jan. 26, 2000 | 10:49 a.m.

SUN WIRE SERVICES

In Las Vegas

Planet Hollywood's financial woes last month caused it to close the All-Star Cafe on the Las Vegas Strip, which employed 100 people. The firm's Planet Hollywood at the Forum Shops at Caesars remains open and employs about 300 people.

Planet Hollywood says it's still interested in casino development opportunities in Las Vegas.

Actor Arnold Schwarzenegger announced Tuesday he is ending his five-year contract with Planet Hollywood International.

As an investor, Schwarzenegger was the public face of the troubled restaurant chain, along with fellow box office heavyweights Bruce Willis, Demi Moore and Sylvester Stallone.

The actor said he has sold his interest in the Orlando, Fla.-based company.

"It was lots of fun and very challenging to come up with and develop the celebrity restaurant concept on an international level," he said in a statement. "Of course, I am disappointed that the company did not continue with the success I had expected and hoped for."

The company last week emerged from federal bankruptcy court. CEO Robert Earl said last week he plans to announce next month a new set of celebrity investors who will appeal to the youth market.

Earl was out of town Tuesday and couldn't be reached for comment.

Separately, Planet Hollywood disclosed details about its emergence from bankruptcy. The company said it will receive $30 million in cash from investors in exchange for an equity interest of about 60 percent to 70 percent in the reorganized company. It also will issue up to $25 million in new senior secured notes.

Holders of at least 5,450 shares of the company's old common stock will receive a percentage of 200,000 new warrants to buy new common stock. Holders of less than 5,450 shares will receive nothing, the firm said.

The plan is expected to go into effect within 30 days, Planet Hollywood said.

Shares of Planet Hollywood fell 22.2 cents, or 55 percent, to 18.3 cents a share Tuesday.