Sale of London Planet Hollywood questioned
Restaurant company Planet Hollywood has been accused of trying to sell its London restaurant on "unusually favourable" terms.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>
The accusation came in an independent report ordered by a bankruptcy court in Orlando, Florida, at the request of the company's unsecured creditors who are owed $20m.
The report questions the proposed sale of the group's London restaurant to its chief financial officer Tom Avallone.
The report also highlights a "tangled web" of ownership arrangements between the company and franchises owned or controlled by company executives or members of the board.
Chief executive and founder Robert Earl said the arrangements were "very complex" but there was nothing wrong with them.
The report also faults Planet Hollywood managers for being ineffective in collecting fees from franchises.
For instance, the group entered a franchise agreement with a company owned by Saudi Arabia's Prince Alwaleed to open restaurants and stores throughout the Middle East and Europe.
Alwaleed, however, has been an investor in Planet Hollywood and a member of his staff has been on Planet Hollywood's board. The report noted that the group had repeatedly written off fees owed by the prince's franchises.
