Hawthorne Race Course and Illinois horsemen heard words of encouragement but got no immediate action during an initial hearing March 3 on Hawthorne's Chapter 11 bankruptcy filing.
Hawthorne filed for bankruptcy Feb. 28 after a cascading series of financial setbacks resulted in its bank, Signature Bank, freezing the track's accounts. That led Hawthorne's checks to horsemen and others being returned unpaid and a decision by the Illinois Racing Board to suspend the license of Hawthorne's harness racing entity, Suburban Downs.
In the filing, Hawthorne listed millions of dollars in debt to simulcast partners, contractors, and others.
Since, the track has arranged $16 million in interim financing as part of an eventual reorganization plan and asked Judge Timothy Barnes at the initial hearing to approve that transaction and authorize specific spending to avoid "immediate and irreparable damage."
Among those requests was funding to pay Thoroughbred and harness horsemen past-due purse money and other reimbursements and to prepare the track for a Thoroughbred meeting scheduled to start March 29. Without clearing those debts, the track and horsemen said, owners and trainers will not ship horses to run at the suburban Chicago track.
"Will the Thoroughbred people run again unless they are made whole?" asked Hawthorne President and CEO Tim Carey. "No."
"We have hundreds of (horsemen) around the country that are holding off their decision (where to race) based on this hearing today," Carey said.
He added that a failure of the race meeting could result in Hawthorne losing its racing license and, without a racing license, the company would lose its long-dormant right to open a racino at the track, damaging the overall value of the property.
The more than six-hour hearing wandered deep into the weeds of bankruptcy law and skirted into details of racetrack operation with some of the pre-bankruptcy creditors objecting to parts of the track's petition and proposed reorganization budget.
William Thorsness, attorney for Signature Bank, grilled Hawthorne officials about the need for immediate release of the financing, the soundness of assumptions underlying the proposed budget, and other details.
At the end of his questioning, though, Thorsness added, "The bank does not want to shut the company down. That is not the intent of our objections in this hearing today."
Barnes identified the most urgent item as paying Hawthorne's employees. He adjourned the initial hearing without taking final action on any requests but set another for March 4 to consider approving the payroll.
And he said he acknowledges the need to take care of the obligations to horsemen.
"I'm not hearing these things for the first time," he said. I grew up in a harness-racing town (in southern Ohio, he later confided) and my son is going to school in Saratoga Springs.
"I'm motivated to get the horsemen paid. But I don't think it has to happen right away."
He set a third hearing for March 10 to consider that and other approvals and authorizations.
"We are disappointed we didn't get resolution today," said Chris Block, president of the Illinois Thoroughbred Horsemen's Association. "But we are encouraged that the judge said he has our interests at heart."
Barnes added, "I hope the horsemen can be encouraged that the court is looking out for them."
