Tuesday, Sept. 15, 2009 | 10:59 a.m.
Deteriorating financial results at the Planet Hollywood casino resort have forced the property to negotiate with lenders to stay afloat – raising the possibility that the property will file for bankruptcy protection as an alternative to reorganizing debts out of court.
In an opportunistic bet for or against its next-door competitor on the Strip, Harrah's Entertainment, according to sources who declined to be named, has purchased a chunk of Planet Hollywood's $860 million mortgage loan.
The investment might position Harrah's to take over Planet Hollywood if the property enters bankruptcy but could also serve as a passive investment that appreciates in value if the economy rebounds or the property's fortunes improve, according to investment analysts not involved in the deal.
Spokespeople for Harrah's and Planet Hollywood declined comment.
Planet Hollywood defaulted on its mortgage loan in August after the resort's performance worsened over the summer.
The loan came due last year but Planet Hollywood exercised an option to extend the maturity date by a year, to December 9. The loan agreement includes a three year extension option that is subject to the payment of a fee and other requirements, according to a second quarter analysis prepared by Deutsche Bank.
Catering to the young and modern crowd, Planet Hollywood is a one-stop shop for entertainment with its massive shopping mall, slew of restaurants, spacious casino and clubs.
The ambiance of the casino is retro-chic meets high-tech with black granite floors throughout and colorful LED lights throughout the space. The theme carries into the 100,000 square-foot casino with 250 flat screens topping off slot machines. The casino is also home to 87 tables, a sports book and a poker room.
There's also the Miracle Mile Shops, one Vegas' largest malls, with 140 stores including BCBG Max Azaria, bebe, Urban Outfitters and The Discovery Channel Store.
Following an afternoon of shopping, guests can satisfy their appetites at one of the gourmet restaurants in Planet Hollywood, like the non-traditional approach to steakhouses at Strip House or check out the exotic Far East motif at KOI restaurant and lounge. And if guests are still looking for more, they can spend the after hours at Privé, Triq or Krave nightclubs.
Perhaps one of the resorts biggest attractions came in March with the addition of "Peepshow." The naughty twist on the story of Little Bo Peep is modern-day spin on the run-of-the-mill Vegas topless review. The "Peepshow" stage has seen visiting celebs like Scary Spice Mel B, "Dancing with the Stars" Kelly Monaco and Playboy's Holly Madison.