Judge approves $20 million in financing for bankrupt Hawthorne
?q=100)
A federal bankruptcy judge in Illinois on Monday approved up to $20 million in debtor-in-possession financing for Hawthorne Racecourse. However, the judge scheduled a hearing for next Tuesday to set a date for when the track must be sold if it is to continue operating as a racetrack.
The approval of the financing will give Hawthorne enough money to continue to operate its current Thoroughbred meet until Aug. 1, according to David McCaffrey, the executive director of the Illinois Thoroughbred Horsemen’s Association, who attended the hearing. Hawthorne had already received approval from the court for approximately $8 million in funding, and the Monday approval allows the track to access up to $12 million more.
However, according to McCaffrey, attorneys representing the track’s numerous creditors introduced a motion on Monday to set a deadline for the sale of the track. If the track does not meet the deadline, liquidation proceedings would begin.
The judge, Timothy Barnes of the U.S. Bankruptcy Court for the Northern District of Illinois, agreed to hold the hearing on Tuesday of next week to set the deadline, McCaffrey said.
“It looks like the deadline they are discussing is sometime in mid-July,” McCaffrey said. “So if they get that sale before then, we can probably finish off the meet this year. If not, that’s it for us, for racing.”
Hawthorne, the last Thoroughbred track on the once vibrant Chicago circuit, opened its meet on Sunday, three weeks later than scheduled. The track filed for bankruptcy in February, claiming arrears on a $52 million loan secured by a mortgage on its 115-acre property.
Barnes had indicated in earlier hearings that he wanted to see the track reopen for live racing so that it could begin to accrue revenues. He had earlier approved the $8 million debtor-in-possession tranche to pay off simulcasting creditors and free up horsemen’s purse accounts.
McCaffrey said that counsel for Hawthorne told the judge on Monday that the track had received inquiries from 20 groups expressing interest in starting due diligence on the track’s financial condition. Ten of the individuals or groups are seeking to continue to operate the track while seeking a casino license, while the other 10 are purely interested in a real-estate play, McCaffrey said.
The Illinois legislature passed a bill in 2019 allowing racetracks to operate casinos, but Hawthorne has been unable to secure a deal that would give the track the wherewithal to pursue the casino license. Hawthorne is owned by four generations of descendants of Robert Carey, who opened the track in 1906.
In its Chapter 11 bankruptcy filing, Hawthorne said that its intention was to find a casino buyer or a partner that would enable the existing owners to pursue the casino license. Under the 2019 legislation, a buyer of Hawthorne’s property would be required to maintain the racing license in order to get approval for a casino license.
Although many of the track’s simulcast providers have resumed sending their signals to Hawthorne and its 11 off-track betting parlors around the Chicago metro area, Churchill Downs Inc. has held fast on refusing to provide the signals from its track, according to McCaffrey. If the company maintains its position, Chicago bettors will be unable to bet on the May 2 Kentucky Derby at Hawthorne or the OTBs.
:: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.