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Aladdin Sales Plan Distributed to Creditors

1 October 2002

by Richard N. Velotta

LAS VEGAS --Attorneys representing the Aladdin hotel-casino said Monday they will begin distributing a draft plan for the sale of the $1.2 billion Strip resort within a week.

Without naming a buyer, attorney William Noall told U.S. Bankruptcy Court Judge Robert Jones that he expects the draft plan to be distributed to creditors in five to seven days, that a hearing on the plan would be conducted in mid-December and the final confirmation of the sale plan could occur in mid-January.

Typically, a draft plan includes the criteria a prospective buyer must meet to submit a bid and an explanation of what the bidder must provide to show its capability of paying, the assistant U.S. bankruptcy trustee in Las Vegas said.

Ron Cundick said draft plans are individually tailored, so they won't always disclose the names of earlier bidders or how much they offer. Some, however, will list a minimum price expected.

The Las Vegas Sun reported last week that a partnership of Marriott International Inc., Pinnacle Entertainment Inc. and Colony Capital LLC is presenting a "stalking horse" bid to acquire the 2,567-room property. No price was disclosed.

According to a Wall Street source familiar with the deal, Bethesda, Md.-based Marriott would manage the hotel, Pinnacle, Glendale, Calif., would manage the casino and Colony Capital, Los Angeles, would invest capital.

"Everything (for the sale) is on track," Noall said after the hearing. He declined comment about who the buyers are.

Aladdin officials, creditors and a company marketing the property agreed to confidentiality agreements approved by the court regarding the hotel-casino's sale. That's why attorneys connected with the case have declined comment on the identity of the buyers.

Under a "stalking horse" arrangement, the bidder would be entitled to a break-up fee if another suitor emerges and wants to pay a higher price for the property.

Representatives of Marriott, Pinnacle and Colony Capital have had no comment on the prospective deal.

In a separate court matter Monday, the Aladdin said it is refurbishing 500 rooms at the hotel in a bid to offer amenities that will enable it to boost room rates.

The project and a $575,000 transfer of collateral was not opposed by GE Capital Corp., the second-largest creditor, which has financed some of the amenities of the hotel and the casino's slot machines.

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