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Aladdin Faces Latest Deadline

LAS VEGAS —- A deadline is once again pending in the ongoing financial saga of the financially troubled Aladdin.

The megaresort's controlling owners and bankers have been negotiating toward an agreement that would see a single company, London Clubs International, own most of the property.

One of the key issues hoped to be resolved by today: resolution of an $8.7 million accounting shortfall in the Aladdin's operations.

Representatives of London Clubs and Aladdin majority owner Sommer Family Trust have met regularly with their bankers for weeks in an effort to eliminate the need for the required payment by the megaresort's parent company.

The money was due in May, and the property's bankers have granted several extensions with the most recent coming last month, as the owners have been in talks to transfer the bulk of the ownership shares to London Clubs.

The British casino company would acquire the family trust's 57 percent interest in the year-old hotel-casino, giving it control of 85 percent of the privately held business.

"The date becomes somewhat arbitrary so long as all parties continue to negotiate," said Fred Lewis, spokesman for the megaresort's parent company, Aladdin Gaming. "Everything's tied together.

"In fact, it may not happen (today). That's not going to be a bad sign. It simply means they're going to continue to negotiate."

Plagued by weak foot traffic and lower-than-expected cash flow, Aladdin Gaming posted a net loss of $20.4 million on revenue of $76.8 million during the quarter ended June 30, according to Tuesday's SEC filing. The company had debts totaling $742.6 million.

The poor numbers continued a trend that has played out since the property's August 2000 opening.

Critics have questioned the wisdom of building the standalone hotel-casino along a Strip dominated by multiproperty companies that have massive customer lists and deep marketing operations.

The Bank of Nova Scotia, the lead banker for the $1.05 billion megaresort, had been seeking a buyer for London Clubs' 39 percent interest in the property, and is now helping to put together a deal that would see the British company own most of the Aladdin.

Late last month, London Clubs Chairman Alan Goodenough resigned, with the 58 year old citing as the cause for his departure, health concerns tied to the stress of operating the Aladdin.

London Clubs spokesman Luke Morton said Monday that the two partners were working toward a final sales agreement, but he knew of no date for an announcement.

"You conclude it when you conclude it," Morton said.

Earlier this month, Aladdin Gaming officials said they are seeking a buyer for five acres of land that borders the Harmon Avenue and Audrie Lane corner of the megaresort's 34-acre property.

The site had been targeted for development of a 1,000-room music-themed hotel, but at least two proposals fell apart amid financial troubles, and now Aladdin Gaming needs a cash infusion from the sale of the acreage.

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