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ORLANDO-Once the owner or controller of an estimated 2.5 million sf of prime retail space at 80 worldwide sites, Orlando-based Planet Hollywood International Inc. is down to an estimated 300,000 sf today in 10 locations, as new charges swirl of possible insider dealings connected to the company’s two Chapter 11 filings in the last three years.

Special auditor Soneet Kapila, president, Kapila & Co., Fort Lauderdale, FL has filed his 57-page, two-month report with U.S. Bankruptcy Judge Arthur B. Briskman who approved the investigation at the request of unsecured creditors.

Robert I. Earl, Planet’s $600,000-a-year chairman, denies any wrongdoing and says through his Orlando lawyer, R. Scott Shuker, any investigation by the Securities and Exchange Commission will clear the 11-year-old company as well.

Kapila’s report, filed Aug. 12, says Planet’s Dec. 31, 2000 year-end filing to the SEC projected it had sufficient cash to carry the company through 2001. But Planet’s directors at a February 2001 meeting hinted the company could be out of cash by April 2001, Kapila’s investigation found.

The company denies misleading its shareholders, arguing its June 2001 SEC filing disclosed Planet’s weakening financial condition and that it might need an immediate cash infusion to remain in business.

That infusion never materialized, however, and in October 2001, Planet voluntarily filed its second Chapter 11 petition, listing $121 million in assets and $131 million in liabilities.

In its first Chapter 11 filing in October 1999, Planet showed $392 million in assets and $359 million in debt.

Kapila’s report criticizes Planet directors for writing off $5 million in bad loans to unnamed celebrities over the last five years. But Earl maintains the company could not have collected those debts because they were backed by Planet stock which became worthless when the Chapter 11 petition was filed.

Besides Earl, major shareholders who collectively own 70% of the company are Saudi Prince Alwaleed bin Talal, the controlling principal of Kingdom Planet Hollywood Ltd., Saudi Arabia; Singapore billionaire Ong Beng Seng, the lead principal of Leisure Ventures; Bay Harbour Management of New York; and Magnet Light Profits, a subsidiary of Star East Holdings Ltd., controlled by Seng, according to previous filings Planet has made to the SEC.

Among former Planet backers and participants in opening-night restaurants worldwide are actors Sylvester Stallone, Arnold Schwarzenegger, Bruce Willis, Demi Moore, Tom Hanks, Helent Hunt, Patrick Swayze, Wesley Snipes, Julio Iglesias, Cindy Crawford, Naomi Campbell, Selma Hayek of Lebanon and Shaquille O’Neal, the wannabe actor of the Los Angeles Lakers.

Stallone has a pending $17.3 million suit against Kenneth Starr, his former business manager, alleging Starr gave him bad advice in buying 3.9 million shares of Planet stock valued at $60 million in 1997. When he sold the stock in 1999, Stallone received only $295,256, according to the actor’s suit filed in California.

Planet went public in 1996. The stock is no longer traded in the Over-the-Counter market.

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