Indianapolis-based Centaur LLC, owner of Hoosier Park horse track and casino in Anderson, has filed for Chapter 11 bankruptcy reorganization, the company announced Sunday.
The company's casino, racing and hotel operations will continue without interruption during the reorganization, it said.
Centaur has been struggling under a heavy debt load for some time. In October 2009, the company missed a $13.4 million payment due on more than $400 million in outstanding debt, putting the company in default with its lenders.
In its court filing, Centaur was not specific about the extent of its debt problems. It estimated liabilities of $500 million
to $1 billion and assets of $500 million to $1 billion.
Philadelphia-based PREIT Services Inc. is listed as Centaur’s biggest unsecured creditor, with a claim of $28.7 million. PREIT Services is an affiliate of Pennsylvania Real Estate Investment Trust, which has done extensive contract and development work for Centaur in Pennsylvania.
In 2007, Centaur agreed to pay PREIT $87 million for terminating a development and construction management contract for a racetrack and casino in Beaver County, Pa.
Centaur’s second largest unsecured creditor is listed as Louisville-based Churchill Downs Inc., with a claim of $15 million. Churchill Downs was one of the original owners of Hoosier Park, which was completed in 1994, but it sold its remaining interest in the facility to Centaur in 2007.
After winning the General Assembly’s approval in 2007 to install slot machines at Hoosier Park, Centaur borrowed heavily to pay Indiana’s $250 million license fee and spent another $150 million on mandatory Hoosier Park upgrades.
Centaur has complained that Indiana’s ongoing gambling taxes, not the $250 million license fee, have hurt its ability to reduce debt. Hoosier Park and its Shelbyville counterpart, Indiana Live!, must fork over more than 47 percent of their gambling revenue in taxes, compared with the 35-percent rate riverboats pay. Most of the difference goes to subsidize Indiana’s horse racing industry.
In October, Centaur filed a Chapter 11 bankruptcy petition in Pennsylvania for two subsidiaries that hope to develop a racino
there. Centaur has long pursued development of the project, called Valley View Downs and Casino, 55 miles northwest of Pittsburgh,
but the project stalled when regulatory approvals and financing there fell through in 2008.
Centaur also has operations in Colorado, where it owns Fortune Valley Hotel & Casino in Central City, west of Denver.
In a press release, Centaur said it planned to emerge from bankruptcy "in a strong financial position with less debt and an improved capital structure." It said "plans continue to move forward for the launch of Valley View Downs in western Pennsylvania."
“For our customers and employees, we look forward to a seamless experience during the reorganization process,” said Jim Brown, Hoosier Park's general manager of gaming, in a written statement. "Positive cash flow generated from daily operations and cash reserves are more than adequate to fund operating expenses, including supplier obligations and employee wages, salaries and benefits during the restructuring period."