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Aladdin Deal on Hold

LAS VEGAS, Nevada –– A federal bankruptcy judge postponed until Tuesday consideration of a $50 million loan to the Aladdin.

U.S. Bankruptcy Judge Clive Jones agreed Wednesday to a request from the bankrupt megaresort's lawyers that the court defer consideration of the loan.

"The loan documents are just not done," Aladdin lawyer Gerald Gordon told the judge.

The loan from the Aladdin's bankers would provide a $50 million line of credit to the struggling property; $9 million from the total loan amount was provided on Sept. 28, the day the Aladdin filed for Chapter 11 bankruptcy protection.

The $9 million allowed the Aladdin to stay open for about 45 days, Gordon said at the time. The remaining $41 million would provide enough cash for the property to remain open through the end of 2002, he added.

Gordon declined Wednesday to say how much of the $9 million credit line the megaresort has used to date. He said two weeks ago at a court hearing that the property had used about $3.3 million, leaving $5.7 million available.

The bankers, led by the Bank of Nova Scotia, are owed about $435 million by the Aladdin and have a deed of trust on the property as collateral for their original loans.

The $50 million loan is designed to keep the property open while Aladdin executives determine whether to reorganize the company's debts, seek additional funds from investors or sell the hotel-casino.

"They're going to do some kind of reorganization," said Candace Carlyon, lawyer for GMAC and General Electric Capital Corp., owed about $72 million on leases of slot machines and other equipment, furniture and fixtures. "The big question is whether the property will be sold."

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