Aladdin gets more time for sales plan

Tuesday, April 30, 2002 | 10:59 a.m.

Attorneys for the bankrupt Aladdin hotel-casino are getting more time to complete a sales procedure plan while potential buyers examine the property and peruse the company's financial records.

Aladdin attorney William Noall told U.S. Bankruptcy Court Judge Robert Jones Monday that "several interested parties" are looking at the 2,567-room resort. Owners hope to sell the property, rather than develop a reorganization plan.

Noall would not say how many potential bidders are looking at the $1.2 billion property, which filed for Chapter 11 bankruptcy protection in September. Each of the prospective bidders signed confidentiality agreements.

"We're confident that a party in communication with us eventually will develop a proposal that will lead to an offer," Noall said after the hearing.

Los Angeles real estate developer Colony Capital is one reported bidder with an offer of between $375 million and $500 million. But other bidders could up the ante for the Aladdin, which last week reported improved financial results for March.

Aladdin officials credited a marketing blitz in March that boosted occupancy to 96.5 percent for the month and helped accomplish a 29 percent increase in revenues from February to March to $21.7 million.

Although the property still posted a $1.06 million loss for the month, that was down from the $4.2 million loss reported in February.

The Aladdin reported cash flow of $7 million for the first quarter, well below the performance of other Strip properties.

Sustained financial improvement is critical for Aladdin because that should result in a higher sales price for the property. Attorneys will gather again May 30 to consider a sale procedure plan.

Meanwhile, attorneys for Northwind Aladdin LLC concurred to a Sept. 9 trial date to resolve a dispute over the ownership of an on-site power plant that provides the resort with heated and chilled water as well as backup electricity. The plant cost $40 million to build and was financed by Northwind and other outside investors.

Aladdin officials say they own the plant and that Northwind's claims should be treated as outside financing. But if Northwind is judged to be the owner of the plant, the company would be entitled to full recovery from the sale.

Jones has said the lawsuits on the power plants must be resolved before the resort sale can be finalized. Sept. 9 was the earliest time that the court and the attorneys for the two parties could set aside an entire week for a trial.