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Aladdin in Need of a Genie

15 January 2003

LAS VEGAS, Nevada -- As reported by the Associated Press: "Building a megaresort on the Las Vegas Strip is supposed to be easy money, but that wasn't the case with the $1.4 billion Aladdin hotel-casino, the latest of the city's glittery gambling temples.

"The Aladdin, which filed for bankruptcy protection just a year after its August 2000 opening, is now looking for something that has long attracted the broke and broken to Las Vegas: a second chance.

"The Arabian nights themed casino needs a buyer, one with pockets deep enough to cover a $400 million to $500 million asking price.

"…What seemed like a good business plan, one that industry analysts had even touted before the casino opened, turned out to be deeply flawed.

"The Aladdin, which has 2,565 hotel rooms, quickly flopped after running over its construction budget by about $400 million. There were delays while it was built, and the casino even had to postpone its grand opening for a day because it needed more time to test its fire safety system.

"Design flaws including poor casino access for pedestrians and vehicles kept many visitors away. Those who managed to find their way inside discovered there was relatively little to do other than gamble and eat because the Aladdin's owners had broken a steadfast rule in Las Vegas -- give the people plenty of nightlife.

"Soon the Aladdin could not make interest payments on its bond debt. Then came the precipitous tourism dip following the September 11 terrorist attacks. The Aladdin was forced to file for bankruptcy on September 28, 2001, only the third Strip casino in two decades that filed for bankruptcy.

"…But in the past several months, the Aladdin has taken small steps toward solvency that have helped stave off a desperation sale.

"…The Aladdin owes secured creditors more than $537 million and about $85 million to unsecured creditors, according its most recent monthly operating statement.

"…On the hotel side of the business, money continues to trickle in thanks to occupancy rates that have hovered above 90 percent and consistent room charges…"

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