Aladdin sale moves along

Wednesday, June 26, 2002 | 11:04 a.m.

Plans to sell the bankrupt Aladdin hotel-casino took another step forward Tuesday with the approval of a sale procedure in U.S. Bankruptcy Court.

Judge Robert C. Jones approved the motion that sets ground rules for the sale of the $1.2 billion property that filed for Chapter 11 bankruptcy protection in September.

Among the measures agreed upon were the appointment of the accounting firm KPMG LLP, Los Angeles, to market the property to prospective bidders. The agreement also enables bidders to inspect the company's financial records and assures confidentiality of the suitors.

"This basically sets the sale procedure in motion," said Aladdin attorney William Noall after the Tuesday hearing. "We resolved some of the points of contention. We have a procedure to sell."

He explained that some of the contention involved resolving a variety of creditor concerns, including the appointment of KPMG's Jeff Truitt to market the property. Truitt could not be reached for comment today.

Noall said the sale also has been taken off the Bankruptcy Court's calendar, enabling KPMG flexibility to seek offers for the property, then solicit counterproposals from other bidders. Noall said the matter would not be taken back to court until a firm offer has been made.

Noall has said that "several interested parties" have been looking at the 2,567-room resort that opened in August 2000. He said the confidentiality agreements prohibited from listing the potential suitors.

One reported bidder was an affiliate of Colony Capital LLC, Los Angeles, a real estate investment firm that at one time owned Harveys Casino Resorts.

Colony Capital had a reported offer of $375 million to $500 million, which would leave little money to pay many of the Aladdin's creditors after major secured creditors are paid. General Electric Capital Corp., the property's second largest creditor with a $70 million claim for slot machine and equipment loans, said the reported price would not be high enough to protect its investment.

The Aladdin's banks are owed $437.5 million, which would have to be paid before other creditors' claims could be addressed.