Hawthorne Race Course completed a parlay in its bankruptcy proceedings with a successful opening day of racing at the suburban Chicago track on April 19 and approval by Judge Timothy Barnes less than 24 hours later for a final order authorizing interim financing and budget.
The track, which filed for Chapter 11 protection at the end of February, still faces a July deadline to find an investor or buyer to avoid liquidation. And with a limited horse population on the backstretch, racing officials admit filling fields for twice-a-week racing will be a challenge.
For the short term, however, Hawthorne President Tim Carey was celebrating seeing horses on the track for the first time since the winter harness meeting ended prematurely Jan. 1 amid financial turmoil.
Opening day featured seven races and was received enthusiastically by fans on track.
"The place was packed," Carey said. "The vibe was great. There were a tremendous amount of families. It was a great day of racing."
The court earlier had approved payment to "critical vendors" that allowed Hawthorne to pay employees, prepare the racing surface for a Thoroughbred season and otherwise clear the way for a resumption of live action.
"I want to thank the court again for allowing us to do that," Carey said.
Barnes said he has been convinced through testimony in several days of hearings that, even in a liquidation of assets, there is sufficient value in Hawthorne to pay debts to secured creditors after the limited pool of interim financing is spent.
That ruling, he said, is based on tentative offers of more than $115 million for the real estate—a value Carey has said could be significantly higher if Hawthorne is allowed to continue in operation and move forward with plans, dormant for nearly seven years, to construct a racino at the track.
David Campbell, a financial consultant working with Hawthorne, said sales efforts will work on "parallel tracks" to market the property for development or for ongoing operation. He said one letter of intent has been submitted, suggesting a price of $115.1 million for the real estate, which he said would be negotiable.
"I think there is more value to be had there," Carey said.
Before approving the interim financing, Barnes made it clear that a successful bid for Hawthorne would be a "highest and best" offer. "That's not always a matter of just the balance sheet," he said.
The approval of the interim financing and a temporary budget includes authorization to pay long past-due purse money and other funding to harness horsemen, many of whom have documented extreme hardship as a result of money tied up in Hawthorne's financial woes.
"It's a good day," said Tony Somone, executive director of the Illinois Harness Horsemen's Association.
The target date for a sale is July 13.
