4th casino files for bankruptcy protection

Mar 9, 2010 — The Indianapolis Star

Bill Ruthhart

Mar. 9, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- Centaur Gaming, the parent company of the Hoosier Park horse track casino in Anderson, announced Monday it would file for bankruptcy reorganization but vowed to continue its gambling operations without interruption.

The announcement comes less than five months after two of Centaur's Pennsylvania-based subsidiaries filed for bankruptcy. Monday's filing will place the rest of the Indianapolis-based company in Chapter 11 bankruptcy.

"There are no surprises here," said Curt Wilson, Centaur's chief financial officer. "We've known for some time now that this step would be necessary. A Chapter 11 filing is a likely outcome for such a process with healthy, operating businesses. So, we're pleased."

In addition to Hoosier Park, Centaur owns the Fortune Valley Hotel and Casino in Central City, Colo. And it is working to develop a new Valley View Downs and Casino project in western Pennsylvania. Although its casinos are making money, Centaur has been saddled with debt payments it has been unable to sustain.

In October, Centaur missed a $13.4 million payment on the company's more than $350 million in debt, most of it incurred for a $250 million state license fee and a $100 million initial investment in the racino at Hoosier Park in 2008.

"Our operations are strong. We have more than adequate cash flow to meet the operating needs," Wilson said. "It is the capital structure, debt service, at the holding company that has caused us to take these steps."

With Centaur's filing, four of Indiana's 13 casino properties are now involved in some stage of bankruptcy proceedings.

Majestic Star Casino LLC, which owns the two Gary riverboats, filed for Chapter 11 in November. Tropicana, owner of Evansville's Casino Aztar, also has filed for bankruptcy protection.

Ernie Yelton, executive director of the Indiana Gaming Commission, said Aztar appears likely to re-emerge from bankruptcy under new ownership this week.

"In a perfect world, we wouldn't have to be concerned about any of the casinos, or their parents, going through bankruptcy," Yelton said. "But the fact of life is we've gone through a rather substantial recession, we have incredibly tight credit markets out there, and we're spending a little more time learning about bankruptcy than we would prefer to.

"But I don't think that's unique to the gaming industry; it's a broad brush with all kinds of businesses in the United States right now."

Yelton said he did not expect the bankruptcy to affect Hoosier Park's business or the tax revenue it sends to the state.

"We do not anticipate that there will be any interruption in the operation at Hoosier Park," he said. "We don't foresee any job force reduction, and we expect the tax revenue that comes to the state and locals to remain stable."

Unlike in the bankruptcy proceedings involving the Gary and Evansville casinos, Centaur reached an agreement in principle with its lenders before the bankruptcy filing, Wilson said. Having a pre-packaged agreement should speed up the process, he added.

"Right now," Wilson said. "we have every reason to believe we should be able to wrap this process up by the end of July."

Wilson said Centaur has no plans to sell Hoosier Park, but it is shopping its Colorado casino to potential buyers.

After the company emerges from bankruptcy, Wilson said, Centaur plans to secure financing for the new Pennsylvania casino, which was in place until the recession tightened up credit markets.

Newstex ID: KRTB-0095-42719926