Aladdin is sued by fired exec

David Strow

Wednesday, Oct. 3, 2001 | 9:40 a.m.

The Aladdin's ousted chief executive has hauled the bankrupt Strip casino into court, accusing it of wrongfully firing him 12 days ago.

Richard Goeglein filed the lawsuit Friday in Clark County District Court, accusing its holding company of trying to avoid payment of a severance package. Goeglein left the resort seven days before it filed for Chapter 11 bankruptcy protection, and one day after the Aladdin warned investors it was at risk of closure.

In announcing Goeglein's departure Sept. 21, the Aladdin didn't specify if he was fired or had resigned. However, Goeglein claimed in the lawsuit he was told by an unidentified Aladdin representative that he was being terminated "for cause."

That distinction is crucial. If Goeglein was fired for cause, the Aladdin would only have to pay him salary accrued through the day of his firing. If without cause, Goeglein would be entitled to a severance package.

For-cause definitions, according to the lawsuit, include gross negligence that isn't corrected after a written warning from the board, the revocation of Goeglein's gaming license, a material breach of Goeglein's employment agreement, embezzlement or conviction of a felony.

"(Goeglein has) worked tirelessly and with the utmost integrity to discharge (his) employment responsibilities for the benefit and at the behest of the (Aladdin)," the lawsuit said. "No 'cause,' as defined by the contract, exists against (Goeglein) whatsoever."

The lawsuit said Goeglein demanded twice that the Aladdin identify the cause for his firing, but has received no response.

Goeglein's employment contract, initiated in January 1997, had a term of five years and six months, and entitled Goeglein to $600,000 per year. The lawsuit said about 40 weeks remained on the contract -- about $475,000 in pay. Goeglein's contract also called for a five-year, $500,000 consulting agreement to begin when his employment contract ended.

In addition to these damages, Goeglein is seeking punitive damages for the Aladdin's alleged "malicious, oppressive and fraudulent" actions in relation to his termination.

Aladdin officials could not be reached for comment.

Even if Goeglein prevails, there are already numerous creditors lining up for payment from the $1.2 billion resort. In its bankruptcy filing, Aladdin Gaming listed liabilities of $593 million, compared to assets of $698 million.

However, Goeglein also named Aladdin Gaming's parent company, Aladdin Gaming Holdings LLC, as a defendant. While this entity owns all of Aladdin Gaming's stock, it has not filed for bankruptcy protection.