In the US, the owner and operator of Indiana Live! Casino and Indiana Downs racetrack, Indianapolis Downs, has filed for Chapter 11 bankruptcy.
In its filing to the US Bankruptcy Court for the District of Delaware, the company said despite generating enough revenue to pay its operating expenses, its debt burden is significantly greater than anticipated. As a result, it is unable to service the debt, which it said reflects a $250m initial licence fee and a high statutory tax rate, under the current terms.
In conjunction with its filing, the operator announced that it had secured debtor-in-possession financing of approximately $103m from a group led by the Wells Fargo bank. This facility would provide immediate access to up to $5m and will lower the company’s interest expenses.
"This filing is unlike many restructuring cases because Indianapolis Downs has steadily grown its revenue and market share since opening," said Gregory Rayburn, chief restructuring officer. "Indiana Live! And Indiana Downs racino is an operationally profitable, but new, business that has not yet received its full potential."
The decision to enter Chapter 11 reorganisation, he said, will allow the company to restructure its debt and make operational improvements.
Both properties will continue to operate during the reorganisation process.
