Planet Hollywood wrote off £3m of celebrity loans

Restaurant chain Planet Hollywood International wrote off $5m (£3m) in loans to celebrities and created a "tangled web" of insider deals that benefited top executives and others, an independent review of the company has shown.
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The independent examiner's report, ordered by the court at the request of the company's unsecured creditors who are owed $20m (£13m), was filed in a US Bankruptcy Court in Orlando, Florida, on Monday.

Bruce Willis, Demi Moore and Sylvester Stallone were once counted as celebrity backers at the restaurant company. The names of celebrities who received loans were not made public.

The examiner, Soneet Kapila, criticised Planet Hollywood's founders, chief executive 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 had not decided to write them off, the 57-page report said.

The celebrity backers had been given shares of Planet Hollywood but many of them later wanted to sell them. To avoid bad publicity from celebrity sales, Planet Hollywood helped the celebrities arrange loans secured against the company's stock.

Earl and Planet Hollywood's bankruptcy lawyer, Scott Shuker, said the company did not recover the loans because they were backed by stock that was now worthless and the loans were written off the first time the company filed for bankruptcy protection in October 1999.