Opinion
Editorial: Centaur bankruptcy painful, necessary
In Summary: Centaur bankruptcy is a painful process, but for the benefit of Hoosier Park and the community, this was the right path to take.
In the corporate world, one glitch in a multi-state company can ripple from one unit in Pennsylvania and damage branches in Colorado or Indiana.
Such is the case — though it’s more than a glitch — with Centaur, the corporation that runs Hoosier Park Racing & Casino.
A week ago, it filed Chapter 11 bankruptcy, allowing it to continue to keep the racino doors open while reorganizing corporate and operational structure. Hoosier Park’s doors stay open and 1,000 workers keep their jobs.
Centaur’s filing, recorded in U.S. District Court in Delaware, notes there are more than 10,00 creditors. With assets of $584 million and liabilities of $681 million, creditors will likely see little, if any, return. That will affect the $70,377 owed to Anderson city utilities, $30,400 owed to Ed Martin of Anderson and $425,212 to the Indiana Horse Racing Commission, to name a few.
Unfortunately, that is the way of business in America. In this case, it is also the way of Indiana government taking advantage of the average Hoosier’s doubts over gambling as economy savior. Unlike other gambling outlets in Indiana, the state charged Centaur a $250 million licensing fee and imposed a tax rate on the racinos, including Shelbyville, that was higher than riverboat levies.
In part, Centaur says, those fees led to bankruptcy. To a larger extent though, Centaur had substantial delays in the licensing and construction of its Valley View Downs in Lawrence County, Pa. There is no cash flow from that venture. And income from Hoosier Park, off-track betting sites in Indianapolis, Fort Wayne and Merrillville and a casino in Colorado doesn’t cover two liens on Centaur facilities, according to court documents.
Bankruptcy is a sad chapter in any company’s history but it is accepted in America as a way to compromise; it’s deal-making that hurts other business (who could also file bankruptcy). Corporate executives become deal-makers, not thriving businessmen, in order to save face with investors. And where better to make a deal than a gambling facility where every bettor is seeking an elusive deal for fortune.
Bankruptcy shouldn’t surprise us. And we’ll agree that it is the route for Centaur, the right path for a group of executives who have shown concern for this community.
In this case, we’ll accept bankruptcy. It’s a deal we’ve all made to hang onto 1,000 jobs.
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