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.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.