IBJNews

Shelbyville casino could exit bankruptcy in August

Back to TopCommentsE-mailPrintBookmark and Share

Indianapolis Downs LLC, the operator of a horserace track and casino in Shelbyville, could exit Chapter 11 at the end of August, under procedures approved Thursday by the U.S. Bankruptcy Court in Delaware.

The track’s owner filed a reorganization plan in April that was negotiated with second-lien creditors and Fortress Investment Group LLC. The plan calls for selling the facility if the price is acceptable to the second-lien creditors. Otherwise, the plan will give ownership mostly to second-lien lenders.

Indianapolis Downs fielded several offers for the property earlier this year, but they weren’t high enough to suit the troubled company or its creditors.

On Thursday, the bankruptcy judge approved the disclosure statement explaining the plan. The judge also gave his stamp of approval for auction procedures. The disclosure statement provides pertinent information about the plan.

Bids must be submitted by July 20, and an auction will be conducted on July 31 if acceptable bids are offered. Although prospective buyers have been negotiating and submitting offers, none so far is acceptable to the second-lien lenders, according to the disclosure statement.

Creditors can't vote on the plan until July 31. The confirmation hearing for approval of the plan is set for Aug. 22.

The plan provides that if there isn’t a third-party buyer, the loan of about $100 million financing the Chapter 11 case will be paid off. Second-lien lenders will receive a new second-lien term loan, 95 percent of Class A warrants, and 95 percent of a new unsecured term loan paying interest with more debt. If there is an acceptable sale price to a third party, second-lien creditors will receive the proceeds, less an agreed amount earmarked for third-lien creditors.

If there is a sale, third-lien creditors are to receive the agreed amount from second-lien creditors plus the surplus if the second-lien is fully paid. Absent a sale, third-lien creditors will receive 5 percent of the new unsecured term loan, 5 percent of the Class A warrants, and all of the Class B warrants.

Unsecured creditors, with claims that may total from $9 million to $24 million, are not to receive anything.

The track missed an interest payment in November 2010 on $375 million in second-lien notes. The reorganization begun in April 2011 is being financed with a $103.1 million loan from the existing first-lien lenders, with Wells Fargo Bank NA as agent. Secured liabilities of the so-called racino include $98.1 million owing on the first-lien financing, $375 million outstanding on the second-lien notes and $72.7 million on third-lien subordinated notes.

The Indiana Downs track opened in 2002. The 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 says assets are more than $500 million while debt is less than $500 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. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

ADVERTISEMENT