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.•


Post a comment to this story

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

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. I am a Lyft driver who is a licensed CDL professional driver. ALL Lyft drivers take pride in providing quality service to the Indianapolis and surrounding areas, and we take the safety of our passengers and the public seriously.(passengers are required to put seat belts on when they get in our cars) We do go through background checks, driving records are checked as are the personal cars we drive, (these are OUR private cars we use) Unlike taxi cabs and their drivers Lyft (and yes Uber) provide passengers with a clean car inside and out, a friendly and courteous driver, and who is dressed appropriately and is groomed appropriately. I go so far as to offer mints, candy and/or small bottle of water to the my customers. It's a mutual respect between driver and passenger. With Best Regards

  2. to be the big fish in the little pond of IRL midwest racin' when yer up against Racin' Gardner

  3. In the first sentance "As a resident of one of these new Carmel Apartments the issue the local governments need to discuss are build quality & price." need a way to edit

  4. As a resident of one of these new Carmel Apartments the issue the local governments need to discuss is build quality & price. First none of these places is worth $1100 for a one bedroom. Downtown Carmel or Keystone at the Crossing in Indy. It doesn't matter. All require you to get in your car to get just about anywhere you need to go. I'm in one of the Carmel apartments now where after just 2.5 short years one of the kitchen cabinet doors is crooked and lawn and property maintenance seems to be lacking my old Indianapolis apartment which cost $300 less. This is one of the new star apartments. As they keep building throughout the area "deals" will start popping up creating shoppers. If your property is falling apart after year 3 what will it look like after year 5 or 10??? Why would one stay here if they could move to a new Broad Ripple in 2 to 3 years or another part of the Far Northside?? The complexes aren't going to let the "poor" move in without local permission so that's not that problem, but it the occupancy rate drops suddenly because the "Young" people moved back to Indy then look out.

  5. Why are you so concerned about Ace hardware? I don't understand why anyone goes there! Every time ive gone in the past, they don't have what I need and I end up going to the big box stores. I understand the service aspect and that they try to be helpful but if they are going to survive I think they might need to carry more specialty parts.