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Indiana Downs & Indiana Live! Casino File For Chapter 11 Protection in Delaware

Apr. 07, 2011 5:25 AM ET
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 Late Wednesday night/early Thursday morning, Indianapolis Downs LLC and Indiana Downs Capital Corp. voluntarily filed for bankruptcy protection in Wilmington, Delaware. The companies operate the Indiana Downs and Indiana Live! Casino, which is a combined race track and casino (or "racino") located in Shelbyville, Indiana. They also operate two off-track betting (or OTB) satellite wagering facilities, which are located in Evansville, Indiana and Clarksville, Indiana. The race track opened in 2002, but the casino only opened in its permanent facility in March 2009 (the casino initially opened in a temporary facility in June 2008). In 2010, the racino generated $270 million in revenue and captured 53% of the Indianapolis market. 

Despite being a "growing business" and generating positive cash flow, the companies filed for chapter 11 protection as a result of "certain operational issues inherent in the early stages of a gaming facility and financial issues, primarily their ability to service the long term debt incurred because of an initial $250 million state-mandated license fee and a high statutory tax rate." However, the companies state in court filings that, notwithstanding the bankruptcy filings, they expect that "their enterprise value (and the value of the secured lenders' collateral) will grow during the pendency" of the bankruptcy cases. The companies intend to use the chapter 11 cases to restructure their institutional debt (they report that they were unable to negotiate the required concessions from their lenders outside of bankruptcy), while also seeking operational improvements and legislative relief.

Key court filings to date include the following (click on the links to access the court filings):

Read more: Bankruptcy News & Analysis: Indiana Downs & Indiana Live! Casino File For Chapter 11 Protection in Delaware http://blog.ch11cases.com/2011/04/indiana-downs-indiana-live-casino-file.html#ixzz1IpNvuUgh

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