Story details rift between partners at Aladdin resort

Wednesday, July 12, 2000 | 11:22 a.m.

Gaming board

Key Aladdin executives were to appear before the state Gaming Control Board in Las Vegas for licensing today.

They are Jack Sommer, chairman; Richard Goeglein, chief executive; Ronald Dictrow, executive vice president; William Timmins, chief operating officer and Thomas Lettero, chief financial officer.

Also due to appear are executives from Aladdin partner London Clubs International including Alan Goodenough, executive chairman and director.

A page one Wall Street Journal story today detailed how New York real estate developer Jack Sommer left his partner London Clubs International PLC with much of the responsibility for cost overruns at the $1.4 billion Aladdin resort under construction on the Las Vegas Strip.

The story detailed how Sommer's family trust -- once valued by Forbes magazine at $500 million -- is of unknown value, apparently is illiquid and may not be controlled by Sommer, but by his mother Viola Sommer. The trust has been seen as the source of Sommer's wealth and many had assumed it would guarantee payment of construction cost overruns.

"When the Aladdin project repeatedly ran out of money, temporarily halting construction, the Sommer trust didn't come up with the cash to get it going again; it said it didn't think the additional expenditure would be a responsible investment. Instead, London Clubs was forced to increase its initial $50 million investment to roughly $180 million to get the project finished," the Journal said.

London Clubs executives told the Journal they wish they had learned more about Sommer and his financial resources before going into business with him. Alan Goodenough, the British company's chairman, says he is now convinced that the Sommer family trust is "totally illiquid" -- that is, unable to sell assets or even to borrow against the value, the Journal said.

It said some suspect Sommer's mother, Viola, 79, effectively controls the trust and has been unwilling to use it to invest more in her son's project. The Sommers won't disclose the trust's value.