Centaur LLC, the owner of Hoosier Park Racing & Casino saddled with significant debt and interest payments, has filed for bankruptcy.
The Indianapolis-based company made the announcement in a press release disseminated in the early morning hours March 7. In an effort to restructure its debt, Centaur and its subsidiaries, Hoosier Park, Fortune Valley Hotel & Casino and Valley View Downs & Casino, have elected to file voluntary bankruptcy petitions under Chapter 11.
The release stressed operations at the Anderson, Ind., racetrack and casino and Central City, Colo., casino would continue without interruption. Hoosier Park hosts both Thoroughbred and Standardbred racing. The track is set to begin an 80-day harness meet March 25, and a 63-day Thoroughbred meet later this year.
“Over the past several months, we have taken steps to bring our capital structure in line with current marketplace realities and other critical factors,” Centaur chairman and chief executive officer Rod Ratcliff said in a statement. “It is important to understand our corporate balance sheet is the issue, not our businesses in Indiana, Colorado, or Pennsylvania.
“This necessary step will provide us with the financial flexibility to strongly position the company for future success. During Centaur’s 18-year history, we have taken great pride in everything we do. It’s a new beginning to a bright future.”
Centaur borrowed heavily to fund projects in Indiana and Pennsylvania. In October 2007, the company finalized a $1-billion financing package, with nearly half the loan earmarked for construction of Hoosier Park’s 92,000-square-foot casino and payment of a $250 million licensing fee to the state. The remainder of the loan was designated for use in the company’s Valley View Downs project, a proposed harness track and casino in western Pennsylvania.
Last October, Centaur missed a scheduled $13.4-million interest payment on a $400-million-plus loan. To help preserve the Valley View Downs effort, two of the company’s affiliated entities, Valley View Downs LP and Centaur PA Land LP, filed for voluntary Chapter 11 bankruptcy to help retain a racing permit in Pennsylvania.
The March 7 release stated that plans continue to move forward with the project, and that it will be business as usual at Hoosier Park and Fortune Valley Hotel & Casino.
“Hoosier Park and Fortune Valley are healthy, successful businesses, staffed by dedicated team members who provide an outstanding entertainment experience for our guests,” said Hoosier Park general manager of gaming Jim Brown. “It will be business as usual at all properties.”
In the interim, Centaur said it will file motions to “provide for the uninterrupted payment or satisfaction of obligations to our customers, horsemen, and our employees, as well as taxes and regulatory fees.”
Indiana’s racing industry receives 15% of adjusted gross receipts from the casino operations at both Hoosier Park and Indiana Downs. During fiscal year 2009, that amount totaled $57 million, with the Thoroughbred industry receiving roughly $25 million for purses and breed development.
According to the release, Centaur officials expect the company to emerge from Chapter 11 within a few months.
“We have reached an agreement in principal with our first lien lenders and expect to file a plan with the courts in the near future, with a target of successfully emerging from bankruptcy before the end of July,” Centaur chief financial officer Kurt Wilson said.
According to the bankruptcy petition, the largest unsecured creditor is PREIT Services, which is owed $28.7 million under a contract. According to its Web site, PREIT is the Pennsylvania Real Estate Investment Trust.
Second on the unsecured creditor’s list is Churchill Downs Inc., which previously owned Hoosier Park and is owed $15 million under a contract. Other major unsecured creditors include the Indiana Horse Racing Commission, owed $425,212 for a regulatory fee; the Indiana state auditor, owed $133,162 that is being disputed by Centaur; and gaming machine companies IGT and WMS Gaming, which are owed $61,351 and $56,924 , respectively.