IBJNews

Casino operator Centaur aims to exit bankruptcy much leaner

Hoosier Park owner shedding two other assets

Back to TopCommentsE-mailPrintBookmark and Share

Hoosier Park owner Centaur Inc., which nearly three years ago was flying high after attracting $1 billion in investments, is becoming a shell of its former self.

Centaur began having trouble making debt payments on properties last year and declared Chapter 11 bankruptcy in Delaware in March. Its debts total more than $600 million.

Besides Hoosier Park in Anderson, Centaur owns the Fortune Valley Hotel & Casino west of Denver and the troubled Valley View Downs project northeast of Pittsburgh.

Centaur is set to unload Fortune Valley in an Aug. 23 auction. The so-called stalking horse bidder is Luna Gaming Central City LLC, which has offered $10 million, including $7.5 million in cash.

The Indianapolis company also has asked a federal judge to approve bidding procedures to auction ownership of Valley View, a planned racetrack-casino project.

Centaur fact boxCentaur in 2007 received Pennsylvania’s last harness-racing license, which qualified it for a casino license. Project financing fell through the next year, however, and it has been unable to secure the casino license from state regulators since.

“Assuming that [Centaur sells] off the Colorado and Pennsylvania properties, we’re just looking at the Anderson facility with no plans for expansion outside of the state, one would presume,” said Ed Feigenbaum, publisher of Indiana Gaming Insight.

That’s a far cry from the ambitious growth it sought after buying out the majority partner of Hoosier Park, Louisville-based Churchill Downs Inc., in 2007.

Soon thereafter, the General Assembly approved the addition of 2,000 slot machines at each of the state’s two horse tracks, Hoosier Park and Shelbyville’s Indiana Downs. Centaur ramped up debt to pay the state’s $250 million license fee and to expand Hoosier Park.

But after Centaur’s Pennsylvania project stalled and the economy soured, the company found itself overleveraged. In October, it missed a $13.4 million interest payment, leading the company to seek bankruptcy protection.

Centaur declined to comment on the bankruptcy proceedings, citing the “sensitive nature” of negotiations.

But in a written statement, the company said “it is our intent to emerge from the restructuring process with Hoosier Park Racing & Casino and its three off-track-betting sites as the principal assets of the reorganized Centaur.” The OTBs are in Fort Wayne, Merrillville and downtown Indianapolis.

Hoosier Park has performed well since the state granted it permission in 2007 to install slot machines. Last month, it produced $4.6 million in tax revenue for the state, fourth-best among Indiana’s 13 casinos.

Centaur overall lost $217 million on $214 million in revenue last year, according to financial statements included in court documents. Expenses included roughly $103 million in casino operating costs and $80 million in interest payments.

Centaur’s reorganization plan calls for holders of $405 million in first-lien debt to recover 83 percent of what they’re owed through a combination of mostly new stock and debt. Holders of $207 million in second-lien debt are in line for a 1.4-percent recovery.

In some cases, second-lien holders would not receive anything unless the first holders are paid in full, said Indianapolis bankruptcy attorney Jeff Hokanson, who is not involved in the case.

But oftentimes, he said, “The second lien holder says, ‘Look, you’re doing this liquidation in bankruptcy and we’re only going to make it easy on you if you pay some ransom, some blood money.’”

Centaur hopes to emerge from bankruptcy in March 2011. An analysis conducted as part of the bankruptcy case found that selling off all three parts of Centaur likely would raise $234 million to $276 million. The bulk of the value is in Hoosier Park, which likely would fetch $175 million to $215 million.•

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Uh, sorry Johnnie, but you are incorrect. Despite the assertions by yourself and various defenders and captains, sports attendance is NOT off significantly at most sporting events in the US. Variances in attendance has been in the range of single digits, both + & - for years now. MLB has had most of its best overall attendance nubers in the last decade, and that trend has been consistent for most major sporting events. The number one issue cited by most fans when asked about attendance is the overall cost of attending. The presence of HD and big screen televisions in home doesn't even register, as a factor for not attending an event. VALUE in the product is the key, and apparently is something lacking in the current ICS. What other explanation is there when with what is routinely touted as the "best" racing on the planet, fans are staying away in DROVES. A "close" title battle into the last event at Fontana, with the "cars and stars" of the ICS, and who showed up? MAYBE 8K. Sorry, but HD TV isn't to blame for that kind of fan apathy.

  2. Do you need finance to establish your business ? Are you interested in getting a loan at 3% from our private company? If so please Email: suntrust_oil@blumail.org

  3. If she was worth the $ the public outcry over direct tv dropping them would have kept them on their dishes as we have seen with other companies. I too quit watching channel 13 after she showed up since I left channel 8 because of her all show rather than production results. When Randy on 8 corrected her she had a big head and incorrectly challenged his correction for pronunciation of a city. Other antics while she matures was too much for me with her very inaccurate forecasts. All the forecasters were predicting rain until Thursday except Chris. They predicted sunny on Thursday but instead of rain until Thursday upon which the sun would finally make it out in full glory Chris was right on the money just as I too predicted looking at the radar on weather.gov. One thing I love about Angela is the fear you can see in her every time it thunders in the winter. It far exceeds the entertainment value of her body language (high heel noise drags, depression, etc) when her forecasts are so incorrect. Her hair stands on end, you have to see it!!!

  4. Good Day, Apply For A Loan I am Mr Fernadez Antonio, a private Loan lender and a cooperate financial for real estate and any kinds of business financing. I also offer Loans to individuals, Firms and cooperate bodies at 3% interest rate We offer any kind of loans. email us via fernadezloaninvest@outlook.com LOAN APPLICATION FORM First name:......................... Middle name:......................... Last name:........................................ Date of birth (yyyy-mm-dd):....................... Gender:........................................... Marital status:................................... Total Amount Needed............................... Loan Duration.................................... Address:.......................................... City:............................................. State/province:................................... Zip/postal code:.................................. Country:.......................................... Phone:............................................ Fax:.............................................. Mobile/cellular:.................................. Monthly Income.................................... Occupation:....................................... Best Regard, Mr Fernadez Antonio.

  5. i will love to share my testimony to you all the people in world i got married to my husband about 2 year ago we start having problems at home like we stop sleeping on the same bed,fighting about little things he always comes home late at night,drinking too much and sleeping with other women out side i have never love any man in my life except him. he is the father of my child and i don't want to loose him because we have worked so hard together to become what we are and have today .few month ago he now decided to live me and the kid,being a single mother can be hard sometimes and so i have nobody to turn to and i was heart broken.i called my mom and explain every thing to her,my mother told me about DR.okoro how he helped her solve the problem between her and my dad i was surprise about it because they have been without each other for three and a half years and it was like a miracle how they came back to each other. i was directed to DR. okoro on his email:okorospell@gmail.com and explain everything to him,so he promise me not to worry that he will cast a spell and make things come back to how we where so much in love again and that it was another female spirit that was controlling my husband he told me that my problem will be solved within two days if i believe i said OK So he cast a spell for me and after two days my love came back asking me to forgive him i Am so happy now. so that why i decided to share my experience with every body that have such problem contact Dr okoro the great spell caster on his email addresses spellcasterforlove@outlook.com

ADVERTISEMENT