Wednesday, October 7 Hawthorne Fiasco Update
The Illinois Racing Board held their meeting this month on Wednesday, October 7. It was a very short meeting with only one substantive agenda item. They needed approval to ratify the 2026 Dates Order to comply with the Opening Meetings Act and the Illinois Horse Racing Act. The meeting was brief, lasting less than 15 minutes.
Bankruptcy court also continued on Wednesday, October 7. A 90 minute status update was given but no ruling on the motion to convert this from a chapter 11 to a chapter 7 case. The motion by the IRB stating that the IRB has a fundamental right to initiate administrative proceedings to revoke Hawthorne’s organization license had already been rescheduled until November 10. They were asking the court to enter an order declaring the current automatic stay inapplicable to the IRB administrative proceedings. The Illinois Gaming Board had filed similar.
Another Day in Bankruptcy Court
Today, Wednesday, September 30, on the bankruptcy court docket, a motion by the IRB stated that the IRB has a fundamental right to initiate administrative proceedings to revoke Hawthorne’s organization license. They were asking the court to enter an order declaring the current automatic stay inapplicable to the IRB administrative proceedings. The Illinois Gaming Board had filed similar. After a brief debate, the court extended Hawthorne another three weeks to respond to the motion. After that motion is filed, the IRB and the IGB will have one week to respond to that. After both responses are received, the judge will need two weeks to render his decision. So…we don’t expect to see that final decision until sometime in min-November.
The next court date is scheduled for Wednesday, October 7 where the motion to be heard will be the US Trustee’s request to convert this case from a chapter 11 to a chapter 7 case.
Hawthorne Bankruptcy Proceedings Continue
A hearing in the Hawthorne bankruptcy case was set for Wednesday, September 23. One of the many motions on the docket for the day was the US Trustee’s request to convert this case from a chapter 11 to a chapter 7 case. A decision on that motion was continued to Wednesday, Oct. 7.
Two other key motions scheduled were a request by the Illinois Racing Board and the Illinois Gaming Board. The motion by the IRB stated that the IRB has a fundamental right to initiate administrative proceedings to revoke Hawthorne’s organization license. They are asking the court to enter an order declaring the current automatic stay inapplicable to the IRB administrative proceedings. The Illinois Gaming Board filed similar. That decision was continued to a hearing that will take place on Wednesday, September 30.
IHHA Board Meets With Potential Racino Partners
On Tuesday, September 22, The IHHA held their monthly meeting. Presenting at that meeting were three separate groups who are all interested in the pending south side racino license. All of them said that once they are given the green light by the Illinois Racing Board, they will submit an application for 2027 dates. All mentioned that their racetrack would not be completed in 2027, but would work with us and the Illinois Dept. of Agriculture to secure racing at Springfield and/or the Du Quoin State Fairgrounds. We will continue to talk with them, as we have over the past year, on a regular basis. We remain hopeful that we will survive next year and have some racing dates and then in 2028 begin to reap the benefits of that 2019 gaming bill.
Illinois Racing Board Approves 2027 Dates
The IRB has denied Hawthorne a racing license for 2027. They have approved thoroughbred racing for Fairmount Park. We have been in conversations with other potential racino groups that have told us, that they would be stepping forward within the next few months to request 2027 dates for the open south suburban racino license. The official order can be found here. 2027 IRB Race Dates Order
Hawthorne Racecourse has officially been sold to Allimac LLC.
On Tuesday, September 1st, the keys to the facility were turned over. No horses or people remain on the backstretch.
The next Illinois Racing Board meeting is scheduled for Wednesday, September 16. Fairmount Park has requested thoroughbred dates for 2027 and Hawthorne has requested thoroughbred and harness dates for 2027. It is highly unlikely that Hawthorne will or can receive any of those dates. We are hopeful that we will get a statement from the IRB regarding this matter. We do believe that another entity will be requesting harness dates at some point this year. Traditionally, the September meeting is the dates hearing for the IRB. However, a dates request for 2027 can be applied for at any time of the year from a new licensee.
Even though the sale of Hawthorne has been completed, bankruptcy court continues. The US Trustee has filed a motion for this case to be changed from a chapter 11 reorganization bankruptcy case to a chapter 7 complete liquidation bankruptcy case. That motion is scheduled to be discussed on Wednesday, September 23. That decision will be a critical one because the OTB’s are still a remaining asset that Hawthorne controls. There is still active income and expenses filtering through them and the court will need to decide if Hawthorne can stay in control of them or not.
Watch the video of the IRB meeting from August 18 here.
https://multimedia.illinois.gov/irb/IRB-Board-081926.html
Illinois Racing Board Decisions Critical To Our Future.
Hawthorne is set to be sold to Allimac, a company with no interest in horseracing, on September 1st. The impact of those decisions are critical to our future. Neil Milbert wrote an article about it in a recent edition of "Harness Racing Update." Click here to read it in its entirety. Harness Racing Update
Hawthorne Bankruptcy Update
Hawthorne's bankruptcy case continues along with the September 1st sales date approaching quickly. The thoroughbred horsemen have gotten their purse money for three days of racing in July. So now the only questions remaining are shipping out the horses stabled there and finding new housing for the 500 plus displaced backstretch workers. We learned when everyone else learned that Hawthorne had submitted for racing dates in 2027. With no racetrack on September 1st, no income, and so many financial issues and no communication by them to us or the thoroughbred group, we were as surprised as anyone. The most pertinent decisions regarding our future will ultimately be made by the Illinois Racing Board. We have been in regular contact with them. Will Hawthorne keep their license? If so, for how long? Will the OTB's remain open? If so, how will the profits be distributed? How soon before someone new is allowed to apply for a racing license with the understanding that the 35-mile rule no longer exists? These are just a few questions waiting on answers.
Sales date, backstretch closing date affirmed by the bankruptcy court.
The backstretch at Hawthorne will officially close on Aug.31. The sales date will either be Sept. 1 or 2. Racing is officially over. Hawthorne has requested another $900,000 loan to get them through the next 5-6 weeks. It was granted but with strict concerns. They will have weekly status hearings to make sure they are spending their remaining dollars according to the plan. The U.S trustee said he was very frustrated by the actions of Hawthorne. Information wasn't coming to him as quickly or efficiently as he expected. He warned that if he was not satisfied with the weekly status updates regarding how the money is spent he could file a motion to convert this case immediately into a Chapter 7. The Illinois Racing Board is now faced with making unprecedented decisions. Determining when exactly Hawthorne will lose their license and what specifically it will mean to the Hawthorne's OTB's are just a few of the pending questions.
Court Finalizes Sale of Hawthorne to Allimac 2023
On Monday, July 20, the Hawthorne bankruptcy sales hearing took place. It was finalized and agreed to that Allimac 2023 was the lone bidder and they would acquire Hawthorne racetrack for $90 million. There were no objections to that. The disagreements on the specifics of the deal were in regards to the unpaid purses for thoroughbred horsemen from three race dates in July and how to facilitate the move of the backstretch community. The ITHA represented that approximately 500 people were living on the backstretch, including 150 children and 450 horses. As it stands now, the backstretch will remain open until at least August 31. Whether Hawthorne will pay purses still owed from three days of racing in July remains to be seen. Whether there will be any more live racing this year remains to be seen. Right now there doesn’t appear to be adequate funding for this. We will learn more at the next scheduled hearing, which is set for Wednesday, July 22 at 1pm.