The second New York off-track betting corporation to seek bankruptcy protection has filed a proposed schedule with a federal court to make good on its liabilities.
The Suffolk Regional Off-Track Betting Corp. has asked a federal bankruptcy court to OK its “Plan of Debt Adjustment’’ as part of the OTB’s restructuring to keep it from having to shut down its operations as seen last year by the New York City Off-Track Betting Corp.
The plan was filed a day before Churchill Downs on May 11 asked a federal bankruptcy judge to toss out the Suffolk OTB bankruptcy case.
First in line of the OTB’s secured claims is a New York bank that provided a $5.5 million loan to Suffolk in 2009. The OTB has proposed paying New York Commercial Bank $40,000 a month.
The OTB also reported owing $867,000 in surcharge and pari-mutuel tax and breakage claims, which it proposed to re-pay, without interest, over an 18-month period.
The OTB’s fourth class of liabilities include breeders claims of $113,000 and in-state track payments of $4.1 million, as well as what it calls a “disputed’’ claim by Yonkers Raceway of $1.5 million. The in-state track and breeders claims, the OTB proposed, would be paid back over a three-year period, also without interest.
So-called “customer claims,’’ which includes ADW or winning ticket claims, would receive what the OTB called “full satisfaction.’’ Court documents did not show how much the customer claims total.
The OTB proposed paying back over an eight-year period $3.8 million it owes to various unsecured creditors, including nearly $1 million to out-of-state tracks and $1.1 million to the state employee retirement fund.
“At the current time, (Suffolk OTB) is unable to pay all of its obligations as they become due as a result of a variety of factors, including the latest recession, a decline in handle, excess operating expenses, a statutory structure that imposes monetary obligations on the (OTB) based on its handle rather than on its operating revenues or income and the absence of capital,’’ the OTB said in its court filing dated May 10.
The papers said the OTB “will not be able to operate without continuing losses" unless its Chapter 9 plan is approved.
Suffolk OTB spokeswoman Debbie Pfeiffer said the OTB will pay its creditors 100% of the obligations owed.
The corporation said it has taken a number of steps under a financial reorganization, including closing and reducing hours at some branches, a hiring freeze and workforce reductions. It says it has also sought to increase revenues through such steps as two dozen new Quick Bet terminals and additional on-line wagering offerings.
One of the out-of-state entities owed money by the OTB has formally objected to the bankruptcy petition. In a court filing May 11 by Lexington-based law firm Wyatt, Tarrant & Combs, Churchill Downs sought to have the Suffolk OTB Chapter 9 petition dismissed. Churchill contends Suffolk County did not have the legal authority on its own to seek bankruptcy protection. Churchill, which is one of the OTB’s creditors, said Suffolk failed to get the proper state approval for the Chapter 9 filing.
Churchill noted that NYCOTB’s bankruptcy filing had been approved by executive order by former Gov. David Paterson.
Suffolk filed for Chapter 9 protection on March 18. It came after the closing last year of NYCOTB, which had been the nation’s biggest off-track betting concern. A variety of efforts are still being tossed about at the state Capitol to deal with financial problems of the state’s OTBs, including consolidating the betting entities or, in the case of NYCOTB, bidding out the now-shuttered operations to a private company.