The operator of Indiana Grand Casino and Indiana Downs horseracing track in Shelbyville has reached a $3.5 million settlement with the property’s former manager, The Cordish Co.
The settlement simplifies the process of Indianapolis Downs LLC's winning approval of a reorganization plan at an Aug. 22 confirmation hearing.
The track and Cordish were in multiple disputes over a license agreement and the contract where Cordish assisted in constructing, developing and managing the project. Cordish was making an unsecured claim of $17 million and a separate claim for $33 million allegedly representing an expense of the Chapter 11 case that must be paid in full for Indianapolis Downs to emerge from bankruptcy.
Under the settlement filed last week with the bankruptcy court in Delaware, Baltimore-based Cordish will be paid $3.5 million cash not later than Aug. 22. In addition, Cordish will have an approved unsecured claim for $12 million. Cordish waives all other claims.
The racetrack is asking the bankruptcy judge to hold a hearing on July 17 for approval of the settlement.
The Chapter 11 plan was negotiated with second-lien creditors and Fortress Investment Group LLC. The facility will be sold if the price is acceptable to the second-lien creditors. There will be a July 31 auction if there are acceptable bids. Otherwise, the plan will give ownership mostly to second-lien lenders.
The bankruptcy judge has approved the disclosure statement, allowing creditors to vote on the plan.
The casino, formerly known as Indiana Live Casino, began operations in 2008. The permanent facility opened in March 2009, with 2,000 slot machines and electronic table games. Revenue in 2010 was $270 million.
The petition stated that assets are more than $500 million while debt is less than $500 million.