MGM Grand exec files for Chapter 11 protection in N.J.

MGM Grand exec files for Chapter 11 protection in N.J.

Raises questions about his license for big Nevada hotel

MGM Grand Inc. officially acquired on Feb. 23 the 113-acre Tropicana Hotel Golf Course in Las Vegas, site of its hotel-casino-theme park project, but the development's leadership is suddenly in doubt.

MGM executive Clifford S. Perlman has already been appointed the project's chairman and chief executive officer, but whether he will be licensed by the Nevada Gaming Control Board now appears in question. Six development companies owned by Perlman and his late brother's estate have filed for Chapter 11 bankruptcy in New Jersey, according to a report published in the Las Vegas Sun.

The newspaper also quoted Nevada Gaming Control Board Chairman Bill Bible as stating that the financial problems being suffered by Perlman's companies will be "one of the areas we will want to focus on" when the executive applies for a license because business probity is a requisite for approval.

Though Perlman failed to return phone calls from the Business Journal, he told the Las Vegas Sun that his development companies' financial problems are attributable to a soft real estate market. Perlman said he co-signed real estate loans for the six companies for his late brother, Stuart Z. Perlman, who ran them until he died in January 1988.

"The real estate market collapsed and I'm stuck with all the guarantees," he told the Sun. "I don't think the real estate market back East is any mystery. By the time I apply [for a gaming license] I will have all this behind me."

MGM Grand Chairman Fred Benninger seemed unconcerned about the matter. He said that if Perlman is turned down for a license the company will simply appoint someone else to serve as CEO. Benninger also said that if Perlman is denied, it will not jeopardize or delay the project.

Construction of the MGM Grand Hotel & Theme Park -- which is being hailed as the "largest hotel complex in the world" -- is expected to begin this year and be completed in 1992. It will be built at the site now occupied by the Marina Hotel & Casino, which MGM Grand bought in January. The adjacent 113-acre golf course will be used for the new development's adult theme park, which Benninger said will exploit the U.S. fascination with the movie and entertainment industry.

Estimated cost of the project is $700 million and will employ more than 7,000 people.

"We are looking to accommodate the growing and emerging visitor market to Las Vegas, ranging from high rollers and conventioneers, to tour and travel groups and families," Perlman said in a prepared statement.

MGM Grand also operates the Desert Inn and the MGM Marina Hotel in Las Vegas, as well as MGM Grand Air, the luxury airline with flight service between Los Angeles and New York.