Judge OKs Aladdin Financing Plan

A federal judge has approved a $50-million financing plan for the Aladdin hotel-casino designed to keep the mega-resort open through the end of next year.

Bankruptcy Judge Clive Jones previously had approved a plan that included a $9-million portion of a loan advanced after Aladdin Gaming’s Sept. 28 bankruptcy filing.

The resort’s operators had gone through $4.6 million of that total by Wednesday as the troubled 2,567-room hotel-casino was further hurt by the travel decline after the Sept. 11 terrorist attacks.

The 15-month-old Aladdin reported a net loss of $86.2 million on gross revenue of $65.4 million for the quarter ended Sept. 30.

But Aladdin lawyers said at a court hearing Friday that the $50-million loan will be sufficient to pay employee salaries and other bills through next year because business at the property is expected to improve during the next 13 months.

“This is a key step in our effort to make the Aladdin generate positive cash flow,” Aladdin President and Chief Operating Officer Bill Timmins said.

Even before the slowdown in travel after Sept. 11, the Arabian-themed hotel-casino suffered from weak foot traffic and poor revenue generation in all areas of its operations, prompting the bankruptcy filing, which allows the Aladdin to remain open while its owners seek a buyer or restructure the hotel’s debt.

The financing plan’s approval followed six weeks of negotiations between Aladdin lawyers and the property’s bankers and creditors.

The Aladdin owes its banks slightly less than $435 million, with the financial institutions holding a deed of trust on the property as collateral.