Indiana Downs & Indiana Live! Casino File For Chapter 11 Protection in Delaware

Late Wednesday night/early Thursday morning, Indianapolis Downs LLC and Indiana Downs Capital Corp. voluntarily filed for bankruptcy protection in Wilmington, Delaware. The companies operate the Indiana Downs and Indiana Live! Casino, which is a combined race track and casino (or “racino”) located in Shelbyville, Indiana. They also operate two off-track betting (or OTB) satellite wagering facilities, which are located in Evansville, Indiana and Clarksville, Indiana. The race track opened in 2002, but the casino only opened in its permanent facility in March 2009 (the casino initially opened in a temporary facility in June 2008). In 2010, the racino generated $270 million in revenue and captured 53% of the Indianapolis market.

Despite being a “growing business” and generating positive cash flow, the companies filed for chapter 11 protection as a result of “certain operational issues inherent in the early stages of a gaming facility and financial issues, primarily their ability to service the long term debt incurred because of an initial $250 million state-mandated license fee and a high statutory tax rate.” However, the companies state in court filings that, notwithstanding the bankruptcy filings, they expect that “their enterprise value (and the value of the secured lenders’ collateral) will grow during the pendency” of the bankruptcy cases. The companies intend to use the chapter 11 cases to restructure their institutional debt (they report that they were unable to negotiate the required concessions from their lenders outside of bankruptcy), while also seeking operational improvements and legislative relief.

• Chapter 11 Voluntary Petition . Fee Amount $1039. Filed by Indianapolis Downs, LLC
• Declaration of Gregory F. Rayburn in Support of the Debtors’ Chapter 11 Petitions and Requests for First Day Relief Filed by Indianapolis Downs, LLC. (Attachments: # 1Exhibit A)
• Motion to Continue Customer Programs Motion for Entry of an Order Authorizing the Debtors to Perform and Honor Certain Customer Programs in the Ordinary Course of Business Filed By Indianapolis Downs, LLC (Attachments: # 1 Proposed Form of Order)
• Motion to Pay Employee Wages Motion for Entry of an Order (A) Authorizing But Not Directing the Debtors to Pay (I) Certain Prepetition Employee Obligations, and (II) Prepetition Withholding Obligations, and (B) Directing Banks to Honor Related Prepetition Transfers Filed By Indianapolis Downs, LLC (Attachments: # 1 Proposed Form of Order)
• Motion to Reject Lease or Executory Contract Motion for Entry of an Order Authorizing the Debtors to Reject Certain Executory Contracts and Unexpired Leases Nunc Pro Tunc as of the Petition Date Filed by Indianapolis Downs, LLC. (Attachments: # 1 Proposed Form of Order)
• Motion to Approve Debtor In Possession Financing Motion For Interim And Final Orders (I) Authorizing Post-Petition Secured Financing Pursuant To Sections 105, 361, 362, 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1), 364(e) and 503(b) of the Bankruptcy Code; (II) Authorizing The Debtors To Use Cash Collateral Pursuant To Section 363 Of The Bankruptcy Code; (III) Providing Adequate Protection To The Prepetition Secured Parties Pursuant To Sections 361, 362 And 363 Of The Bankruptcy Code; (IV) Modifying The Automatic Stay Pursuant To Section 362(D) Of The Bankruptcy Code; (V) Providing Related Relief And (VI) Scheduling A Final Hearing Filed By Indianapolis Downs, LLC (Attachments: # 1 Exhibit A# 2 Exhibit B, Part 1# 3 Exhibit B, Part 2# 4 Exhibit C)