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Centaur wins approval to sell Colorado casino

Bloomberg News
August 27, 2010
Keywords
Arts & Entertainment, etc., Casinos, Gambling, Horse Tracks
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Casino and racetrack operator Centaur LLC has been authorized to sell the Fortune Valley Hotel & Casino 40 miles west of Denver.

The buyer, Luna Gaming Central City LLC, is paying $7.5 million in cash plus a $2.5 million note, less adjustments. There were no competing bids.

Centaur filed a revised reorganization plan on July 22 in which holders of $405 million in first-lien debt are slated to recover 83.3 percent from 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, according to the disclosure statement filed along with the plan.

Centaur, which which nearly three years ago was flying high after attracting $1 billion in investments, doesn’t believe that its assets are worth enough to pay first-lien debt in full.

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

The March filings listed assets of $584 million and debt of $681 million. The newer cases resulted from the failure to make payments due in October on a $382.5 million first-lien debt and a $192 million second-lien credit. The companies have horse racing and gambling facilities in five markets in Indiana and Colorado. They were developing a property in Pennsylvania to be called Valley View Downs and Casino 55 miles from Pittsburg.

The companies own Hoosier Park, an Indiana casino and horse racetrack in Anderson, along with three offtrack betting parlors in Indiana. In addition, they own Fortune Valley Hotel & Casino in Central City, Colo., which has a 118-room hotel to complement the casino. The companies generated revenue of $277.5 million in 2009.


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  1. The lack of street-level retail in this part of the Block 400 development is a huge oversight and somewhat perplexing given the high quality of recent city-backed developments downtown. This portion of an otherwise stellar development is going to have an extremely negative impact on the aesthetics, urban environment, walkability, and livability of the NW quad.

    I'm not sure why One America would oppose including retail. And I find it very hard to believe that the thousands of office workers literally footsteps away wouldn't be able to support new lunchtime destinations and other businesses along Illinois and Vermont. We've got to reconnect the disjointed segments of our blossoming downtown, not create yet another lifeless dead zone that no one wants to walk through. Sadly, that is exactly what this massive ugly single-use structure will accomplish.

    Why not follow the precedent set by the proposed garage in Broad Ripple and create an attractive mixed-use structure? Why does the city get it there but not downtown?

  2. Bear mind that DS is just not another lazy, rich kid. He attended Columbia grad school and was in investment banking for 4 or 5 years before joining his dad's company. An annual grant of stock options at market price would be the correct pay-for-performance program then no one could argue with it.

  3. This comes from an executive who gave his wife a Bentley as a wedding present. He is heir to billions of dollars. He should be working for a dollar a year and stock options only. Seems like a conflict of interest, time to bring in a non-relative as CEO. Haven't met him, but have heard his arrogance is legendary.

  4. If the property is improved, property taxes increase - more revenue. If AUL's employment grows, more income taxes - more revenue. If more people move and/or work downtown, it means more demand for goods and services, more employment, more taxes - more revenue, etc., etc. It's not just the city throwing money at big companies. There's much, much more. Yes, the project has private backing, but apparently not enough to make the deal work and therefore they don't have it covered. And while Marsh is a nice anchor, they are no credit tenant like a Kroger or somebody. And if the police department has a major shortfall, they need to reduce the force. This city has way too many policemen.

  5. It's hard to defend billionaires, but David Simon has created a tremendous amount of value for shareholders since joining the company. He is widely regarded as one of the best CEOs in America. The company is growing and making good strategic decisions. And Indy is fortunate to have SPG HQ'd here. Now, does that merit $120 million (about 15 mil over 8 years or so)? Maybe. But this family and David have truly built a business. Should Zuckerberg be worth $20 bil? Who knows. Hopefully David will be supportive of Hoosier charities like his family has.

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