ORLANDO-Like an aged and battered prizefighter, 11-year-old, locally based Planet Hollywood International Inc. has dodged liquidation and escaped the auction block ax by emerging from Chapter 11 protection under the U.S. Bankruptcy Code for the second time in three years.

But the company’s new business plan won’t be court-approved in March 2003 until the chain’s unsecured debt load is reduced to $28 million from $54 million, based on the newest ruling from Judge Arthur B. Briskman in the Orlando division of U.S. Bankruptcy Court.

Briskman also ordered Planet Hollywood to pay $180,000 to special auditor Soneet Kapila, president, Kapila & Co., Fort Lauderdale, FL for his 57-page, two-month investigative report that alleges Planet chairman Robert I. Earl and associates had misled shareholders on the company’s financial health. Earl denied the allegations and said a pending Securities and Exchange Commission probe would clear the company of any alleged wrongdoing.

Planet’s unsecured creditors agreed to the company’s business plan this week after Earl promised to collectively pay them $2.4 million in claims. Unsecured creditors normally wouldn’t receive anything in most Chapter 11 reorganizations, deputy court clerks following the case tell GlobeSt.com.

For Planet Hollywood, the judge’s Dec. 16 tentative approval of the company’s reorganization plan means the firm will be down to about 900,000 sf in 10 owned and 30 franchised restaurants.

That’s a come-down from the mid-1990s when Hollywood celebrities frequently promoted the restaurant in exchange for company stock shares. At that time, Planet Hollywood owned or controlled 80 worldwide locations encompassing about 2.4 million sf of retail.

The chain first filed for Chapter 11 protection in October 1999, listing $392 million in assets and $359 million in debt. The company exited that Chapter 11 in May 2000. But in October 2001, Planet again voluntarily filed its second Chapter 11 petition, showing $121 million in assets and $131 million in liabililties.

Besides London-born Earl, court records show major Planet Hollywood shareholders who collectively own 70% of the company are Saudi Prince Alwaleed bin Talal, the controlling principal of Kingdom Planet Hollywood Ltd. based in 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.

Among former Planet backers are actors Sylvester Stallone, Arnold Schwarzenegger, Bruce Willis, Matt Damon and Demi Moore. 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.

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

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