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Aladdin Reports Fourth Straight Month in Red

26 September 2002

by Jeff Simpson

LAS VEGAS--The bankrupt Aladdin recorded its fourth straight money-losing month in August, the company reported in a recent U.S. Bankruptcy Court filing.

Despite the run of months in the red, the August performance was the property's best since a $2.7 million net profit in April.

The 2,567-room property lost $117,768 in August after losing $2.5 million in July, $3.5 million in June and $423,369 in May.

Aladdin Chief Financial Officer Tom Lettero's most recent monthly financial status summary filed with the bankruptcy court reported $20.6 million in August revenue, compared with $18 million in July, $16.3 million in June and $19.9 million in May.

August expenses were $20.7 million, compared with $19.9 million in July, $19 million in June and $19.5 million in May.

The Aladdin owes its secured creditors $540.3 million, including about $435 million to bankers holding a deed of trust on the property and $70 million to companies leasing equipment and providing slot machine loans.

Unsecured creditors are owed $85.2 million and the Aladdin owes $2.6 million in priority tax claims.

The $1.05 billion property's failure to generate enough cash flow to make timely payments on its debt forced the Aladdin to file for Chapter 11 bankruptcy protection almost one year ago, on Sept. 28.

Casino industry insiders have noted a number of problems that contributed to the Aladdin's woes, including poor design and the failure to give the property a new name after imploding the original Aladdin tower in 1998.

The property also carries an unusually large debt relative to the cash invested by its owners, experts have said.

The consultant the Aladdin hired to sell the bankrupt property, KPMG Corporate Recovery Services partner Jeff Truitt, did not return a Wednesday phone message and was unable to discuss the property's continuing sales process.

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