Alladin hotel-casino likely to file for bankruptcy
LAS VEGAS The financially troubled Aladdin hotel-casino is one step closer to bankruptcy, but it's no longer saying it might have to shut its doors.
The Las Vegas Strip's newest megaresort reported in a Securities and Exchange Commission filing yesterday that it's likely the Aladdin will seek protection from its creditors under Chapter 11 while it reorganizes its finances.
"Aladdin Gaming does not have sufficient cash to permit it to continue conducting business or to cure its defaults," the filing stated.
Under Chapter 11, the filing of a voluntary petition requires the consent of 80 percent of the Aladdin's owners London Clubs International and the Sommer Family Trust.
Aladdin's creditors have said they would consider additional extensions, but only if the resort files for Chapter 11 bankruptcy under which the Aladdin remains obligated for its debts.
The resort has received several credit extensions on a $8.7 million payment that was due in May.
If the Aladdin does not file for bankruptcy protection, its creditors could force a foreclosure sale by the end of the year, the filing stated.
Aladdin officials refused to comment on the company's second SEC filing within a week.
Yesterday's filing came on the heels of the company losing its chief executive officer and Thursday's SEC filing that said the resort might have to close.
A severe dip in Las Vegas tourism and apparent infighting among the resort's owners made the Aladdin a prime candidate for bankruptcy as it has struggled for months under a heavy debt load while its casino fell below expectations.
The Sept. 11 attack by terrorists triggered a huge downturn in the U.S. tourism and gambling industries, further weakening the resort.
The resort last week laid off 500 workers, about one-sixth of its work force.
Earlier this month, negotiations over a proposed agreement between the owners to refinance the property's $742.6 million debt collapsed.