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By Wandering Eyes · Posted
After two days of proceedings in a federal bankruptcy court in Chicago Tuesday and Wednesday, judge Timothy Barnes has authorized the release of funds to pay outstanding wages owed to Hawthorne employees and to pay for the necessary equipment to resurface the track in preparation for a Thoroughbred meet, according to Illinois Thoroughbred Horsemen's Association (ITHA) president Chris Block, who attended the hearings. Hawthorne, and its related companies, filed for a Chapter 11 business reorganization Friday. The filing is built around a “debtor in possession” financing mechanism, which is when a debtor “keeps possession and control of its assets while undergoing a reorganization under chapter 11.” Hawthorne has secured temporary funding of around $16 million from JDI Loans, with a 120-day term limit on these funds. Some horsemen and women have also been unable to access monies in their bookkeeper accounts at the track. This includes earnings as well as funds put into the account in advance of the meet. Block explained that next Tuesday, the judge intends to consider a motion to unfreeze the bookkeeper accounts as part of a second round of funding issuances. If the judge indeed rules next Tuesday to unfreeze the accounts, the funds will be available to the horsemen and women “soon after that,” said Block. “I don't want to say the actual day. Could be Wednesday. Could be Thursday.” Come the end of the annual winter Standardbred meet, the track must be prepared for Thoroughbreds. As of early last week, the rail had been switched but the annual reconditioning of the track surface was moving along in slow-motion fashion without the usual outside contractors doing the work. If all goes according to plan, these contractors will now arrive by this weekend, said Block, and training could begin as early as the middle of next week. While the meet had been scheduled to begin March 29, Black said that now, a more realistic start date is early April. There are an estimated 175 Thoroughbreds currently stabled at the track, under the watch of about 10 different trainers. Other trainers are waiting to potentially ship in. “We're telling them [the horsemen and women] the track will start to get converted over the weekend and looks like we're targeting a start date of the first part of April,” said Block. “We don't have a firm date yet. We're going to have to work with [Director of Racing] Jim Miller and obviously the bankruptcy officials to make sure they understand when they've got to start paying purses. I'll have to work with the racing board as well.” Hawthorne, under President and General Manager Tim Carey, is working with financial advisor Getzler Henrich & Associates on its bankruptcy reorganization. In 2019, Hawthorne received approval by the Illinois Gaming Board (IGB) to build and operate a “racino” with casino-style gambling machines and table games. Since 2019, however, nothing concrete has materialized on that possibility despite repeated promises to the contrary by track operators. Block explained that if at the end of the 120-day loan cycle Hawthorne still hasn't found a business solution (either a partner in any casino or a buyer to purchase it outright), the company could either ask for additional funds to keep operating, or else JDI Loans shoots to the head of the creditor's table to get paid back. “This puts Hawthorne on the shot clock, if you will. They've got to get to a deal. They've got no choice. Ultimately, I would hope and pray there's an entity out there that would like to carry Hawthorne forward as a racetrack or casino, and start the process of rebuilding Northen Illinois horse racing,” said Block. “I think if there's any silver lining from all this, this puts the pressure on them to do that,” Block said, adding that there was no mention during the court proceedings about any specific potential buyers. The ITHA is represented in its legal fight by attorney Kevin Morse. Carey was quoted last Friday as saying, “This is a difficult day for Hawthorne and for my family which has owned Hawthorne for four generations over 117 years, but filing for reorganization is the right thing to do for the Illinois horsemen and for our employees and their families.” At the same time, the TDN understands that several members of several different families with ownership stakes in the racecourse share concerns and outstanding questions about the company's bankruptcy reorganization. They include questions of transparency over the process to secure debtor in possession financing and concerns the business reorganization could materially impact the family's ownership stake in the company. According to Hawthorne's initial bankruptcy filing, the company's estimated assets are between $50 million and $100 million, while the estimated liabilities are between $100 million and $500 million. The list of creditors who have the 20 largest unsecured claims are led by Fanatics LLC, a digital sports platform licensed in Florida, which has an unsecured claim of $8.75 million, according to the filing. The Stronach Group (TSG)-owned Monarch Content Management is next up with an unsecured claim of $7.13 million, according to the filing. Monarch is one of several entities that has stopped sending its simulcast signal to Hawthorne because of unpaid bills. “One of the things they're going to want to do soon is get some of these signals back up and running that they've lost. So, I think that'll be a big part of the initial push by Hawthorne,” said Block. At last month's Illinois Racing Board meeting, the extent of Hawthorne's financial troubles, and with it the enormous ramifications for industry stakeholders in the state, were made glaringly clear. The track's Standardbred stakeholders have been the hardest hit. The meeting followed the action of the state racing board to suspend the operating license of Suburban Downs, Inc., which manages Hawthorne's harness meet, for “failure to provide documentation demonstrating its financial integrity, and proof that they can meet the minimum standards” as outlined in state law. Hawthorne is responsible for more than $580,000 in bounced checks between some 66 individuals in recent months, according to an Illinois Harness Horsemen's Association representative at the meeting. The ITHA is apparently separately owned around $600,000 from Hawthorne for payments dating back seven months. “I feel very good that our horsemen are going to get the opportunity to race, number one. Number two, we'll get training and then eventually racing,” said Block, emphasizing the need for the bankruptcy judge to next Tuesday authorize the unfreezing of the bookkeeper accounts. “These people need their money,” he added. “Everybody is struggling along to keep going here, and this will be a big help for those people.” The post Hawthorne Thoroughbred Meet Gets Important Funding Go-Aheads After Two-Day Bankruptcy Hearing appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions. View the full article -
By Wandering Eyes · Posted
As the keynote speaker at the National Horsemen's Benevolent and Protective Association conference, Everett Dobson, chairman of The Jockey Club, called for more cooperation in moving the sport forward.View the full article -
By Wandering Eyes · Posted
Sycamore Bark Thoroughbreds owner Dan Davidson recalls the excitement of watching Save the Trees, who he bred, become a multiple winner, including a maiden win at Keeneland.View the full article -
Chief is a bit busy mate. Getting tickets and a train ride to the Big Cambridge Night of Champions organized. Don't worry he'll fit you on somewhere. Could be a bit full by the time they get to the Picton Ferry though. 😂😎 -
By Wandering Eyes · Posted
Reigning Horse of the Year Sovereignty continues to progress in his training this winter in South Florida and is under consideration for the April 18 Oaklawn Handicap (G2) for his 4-year-old debut, trainer Bill Mott told FanDuel Racing March 4. View the full article
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