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Court OKs reorganization plan for Hoosier Park owner

February 22, 2011
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Hoosier Park Racing & Casino owner Centaur LLC last week won court approval of its plan to cut debt by about $636 million and exit bankruptcy.

Under the plan, Centaur would exit bankruptcy with about $270 million in debt, down from the $906 million it owed before filing for court protection last year, said attorney Michael Shepherd, who is representing the company.

“This was a fully consensual plan,” Shepherd told U.S. Bankruptcy Judge Kevin Carey during a Friday hearing in Wilmington, Del.

By reorganizing and leaving bankruptcy, the company will be worth about $340 million, according to an estimate by Blackstone Advisory Partners LP financial adviser Steven Zelin.

The bankruptcy-exit plan was possible after the company settled disputes with creditors, including the official committee representing its unsecured, lower-ranking creditors, Shepherd said.

First-lien lenders owed more than $405 million before the company filed bankruptcy will get back more than 80 percent of what they are owed, Shepherd said in court.

Centaur LLC and 12 affiliates filed Chapter 11 petitions in March 2010. Affiliates Centaur PA Land LP and Valley View Downs LP had filed for bankruptcy reorganization in October 2009 to keep a project alive in Pennsylvania. All the companies are subsidiaries of closely held Centaur Inc., which isn’t in bankruptcy.

The company and its affiliates own Hoosier Park, a casino and horse racetrack in Anderson, along with three off-track betting parlors in the state. Its Fortune Valley Hotel & Casino in Central City, Colo., was sold.

Centaur and the owners of Indiana Live casino in Shelbyville borrowed heavily after the General Assembly in 2007 allowed the horse tracks to add slot machines in return for a $250 million licensing fee.

All told, the companies generated revenue of $277.5 million in 2009.

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