Hoosier Park owner Centaur files for bankruptcy
March 07, 2010
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Centaur LLC, owner of Hoosier Park Racing & Casino, announced Sunday, March 7 that the company has filed for bankruptcy in an effort to restructure and emerge with less debt. According to a company press release, Centaur and its subsidiaries, which include Hoosier Park, Fortune Valley Hotel & Casino in Central City, Colorado, and Valley View Downs & Casino, elected to file a voluntary bankruptcy petition under Chapter 11 to ensure that operations continue without interruption. Hoosier Park is slated to kick off an 80-day harness meet beginning March 25.
“Over the past several months, we have taken steps to bring our capital structure in line with current marketplace realities and other critical factors. It is important to understand that our corporate balance sheet is the issue, not our businesses in Indiana, Colorado or Pennsylvania,” Centaur chairman and CEO Rod Ratcliff said in a statement. “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. We are excited about our future, and we thank our guests, employees, vendors and key partners for their support as we navigate the restructuring process. It’s a new beginning to a bright future.”
This is not the first bankruptcy filing for Centaur. The Indianapolis-based company missed a scheduled $13.4 million interest payment on a $400 million-plus loan in October 2009. At the time, two of the company’s affiliated entities in the Valley View Downs project, Valley View Downs LP and Centaur PA Land LP, filed for voluntary Chapter 11 bankruptcy to help retain a racing permit in Pennsylvania. Sunday’s release stated that plans continue to move forward on the proposed harness track in western Pennsylvania. It also noted that cash flow and cash reserves at the company's other two entities are "more than adequate" to cover operating expenses.
“Hoosier Park and Fortune Valley are healthy, successful businesses, staffed by dedicated team members who provide an outstanding entertainment experience for our guests. We will continue to provide our guests with high-value gaming, great dining, generous club rewards, exceptional promotions and special events, and exciting racing. It will be business as usual at all properties,” said Jim Brown, Hoosier Park’s General Manager of Gaming.
The release went on to state that Centaur 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 percent of all slots revenue from the casino operations at both Hoosier Park and Indiana Downs. Centaur officials expect the company to emerge from Chapter 11 within a few months with an improved capital structure.
“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,” said Centaur EVP and CFO Kurt Wilson.
Centaur is seeking relief from a substantial debt load incurred as part of the construction of Hoosier Park’s 92,000 square-foot casino. The casino, which opened in June 2008, cost the company $150 million, which also included a renovation of the track’s grandstand. But the biggest hurdle was a $250 million licensing fee required by the state. For the last two years Centaur officials have lobbied unsuccessfully to relieve their tax burden. Both Hoosier Park and Indiana Live! Casino pay 47 percent in gaming taxes and fees on slots revenue.