Planet Hollywood 'wrote off $5m in loans to celebrities'
Planet Hollywood wrote off $5m (€5.06m) in loans to celebrities, an independent review of the bankrupt company shows.
The restaurant company once counted Arnold Schwarzenegger, Bruce Willis, Demi Moore and Sylvester Stallone as celebrity backers.
The independent examiner's report was ordered by a US Bankruptcy Court in Orlando.
The review was requested by the company's unsecured creditors who are owed $20m (€20.26m).
The names of celebrities who had loans forgiven weren't made public.
The examiner, Soneet Kapila, criticised Planet Hollywood's founders, CEO Robert Earl and Keith Barrish, for being too friendly with the celebrities.
"It would appear that both Earl and Barrish were more concerned with preserving their personal relationships with the celebrities at the expense of the business, creditors and shareholders," Kapila wrote.
The Orlando-based company might have been able to recover the loans if executives hadn't decided to write them off, the 57-page report says.
Earl and Planet Hollywood's bankruptcy attorney, Scott Shuker, says the company didn't recover the loans because they were backed by stock that is now worthless and the loans were written off the first time the company filed for bankruptcy.
A legal analysis is needed to see whether the loans constitute fraud or whether there was management misconduct on other matters, Kapila says.
