Michigan HBPA encouraging Hazel Park horsemen to file claims for costs associated with track closing

Horsemen that had plans to stable and race at the recently shuttered Hazel Park Raceway in 2018 are being encouraged by the Michigan Horsemen’s Benevolent and Protective Association to file claims for damages as creditors in a trust mortgage being executed by the track’s ownership.

Hartman and Tyner, Hazel Park’s ownership group, announced the track’s closure and sale of the property on April 5, a day after horsemen were stopped at the gate during the planned ship-in day, and less than a month before the planned start of the live meet on May 4. Horsemen had been allowed onto the grounds for two days before ship-in to set up the barn area for the horses’ arrival.

In a post on its website, the Michigan HBPA encouraged all of its members to consider filing a claim before the June 15 deadline, and it published a list of potential items to include on the form.

“There’s no guarantee that anybody’s going to get anything, but the only guarantee is if you don’t put in a claim, you definitely won’t get anything,” said Michigan HBPA president George Kutlenios. “That’s the important thing. If anybody bought shavings, if they incurred expenses to ship their horses – any expenses they had when the rug got pulled out, basically, they should put it on that claim form and submit it to the liquidator.”

Other items suggested on the Michigan HBPA website included gas mileage, expenses for finding different arrangements due to the lock-out on ship-in day, cost of storage for items that would have been placed at the track for free, additional personnel costs, damage to trailers or horses associated with waiting at the gate during ship-in day, and late fees associated with transferring horses to other tracks.

In a trust mortgage, a party’s assets are turned over to an independent trustee, in this case Barry Lefkowitz of BL Consultants, who distributes the proper funds to valid creditors on a pro rata basis. Though the procedure sounds similar to a bankruptcy, Lefkowitz said a trust mortgage is typically a more efficient means of liquidation.

“It’s a kind of mechanism that is more economical and usually quicker than the bankruptcy process for distributing to creditors their pro rata share of the assets,” Lefkowitz said. “It’s the same thing done in a bankruptcy, but this is so a third party, independent of the ownership, can give the creditors a sense that things are being treated equitably.”

In a notice to potential creditors on April 4, Lefkowitz estimated that unsecured debt and other claims toward Hazel Park Racing Association Inc. would total approximately $1.75 million. Lefkowitz said the account to pay those debts consisted of money already on hand when he was appointed trustee, along with proceeds from the sale of the property and other assets.

Crain’s Detroit Business reported that Hazel Park, located in the Detroit suburb of the same name, sold to Ashley Capital, a New York City-based warehouse developer that planned to construct two buildings on the site, including one measuring about 600,000 square feet. Terms of the sale were not disclosed, and construction is expected to begin later this year after the current buildings have been demolished.