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Aladdin Ruling to Wait

LAS VEGAS, Nevada -- A federal bankruptcy judge on Tuesday postponed until at least next week a decision on whether to approve a $50 million financing plan for the financially struggling Aladdin.

U.S. Bankruptcy Judge Clive Jones approved Aladdin lawyer Gerald Gordon's request to delay consideration of the cash infusion Gordon has said will allow the megaresort to keep its doors open through the end of next year.

Gordon said final details of the financing deal were still being ironed out late Tuesday morning.

A tentative agreement between Aladdin executives and a group of the megaresort's bankers offering the loan was reached later in the day, he said. Gordon expects the deal to be completed by the end of this week.

"We believe the agreement that's been reached is fair and reasonable," Gordon said. Jones rescheduled the hearing for Nov. 16.

Aladdin bankers provided the megaresort with a $9 million credit line on Sept. 28, the day the 2,567-room property filed for Chapter 11 bankruptcy protection.

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

The bankers offered to loan the property a total of $50 million to allow the property to continue operating while Aladdin executives decide whether to reorganize the property's debt, seek additional funds from investors or sell the hotel-casino.

Jones must approve the $50 million financing offer, which includes the $9 million credit line already provided.

The bankers are slated to receive $1.5 million for providing the interim cash, with $1 million of the fee already approved by Jones. If Jones doesn't approve the $50 million offer, the bankers will be allowed to keep the $1 million fee.

Jones originally scheduled a hearing to consider the financing deal on Oct. 26. The hearing was postponed until Nov. 1 and again until Tuesday.

Gordon said Tuesday that the delay in submitting the financing deal to Jones doesn't place the Aladdin at risk.

"The (Aladdin) continues to perform beyond the expectations of the original document," Gordon said.

The lawyer originally projected that the $9 million emergency credit line would allow the Aladdin to remain open until mid-November.

Gordon said three weeks ago that the Aladdin had used only $3.3 million of the original $9 million credit line, as the property's results surpassed budget projections made in the wake of Sept. 11.

Gordon declined Tuesday to say how much of the credit line remains available.

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