Hawthorne opens up about shaky future, gets opening-day delay

Mired in bankruptcy, Hawthorne had the opening day of its Thoroughbred meet pushed back from this week to April 19 after the Illinois Racing Board heard Wednesday about hopes and worries for the Chicagoland track’s immediate future.

The IRB voted 7-0 to let Hawthorne reduce its season from 80 to 74 days while a beleaguered staff races to get the track ready for training next week.

“The easiest thing we could do right now is just literally take a bid and sell the property,” Hawthorne general manager Tim Carey told the IRB, which met for 1 1/2 hours Wednesday afternoon in Chicago. “As a family business we’ve chosen not to do that. We’ve chosen to put our own money in so that we can go through this process. We believe ... that we can come out of this thing the right way and continue on in horse racing. That’s the intent.”

Carey was flanked at the witness table Wednesday by Hawthorne’s bankruptcy lawyer Barry Chatz and financial advisor David Campbell, both from firms in Chicago.

“We are not marketing real estate, though we are getting lots of offers,” Chatz said. “We did not want to be here. We thought we had a positive relationship with other creditors and our lender. Some things didn’t go the way we wanted to.”

Campbell told the board that the sale of Signature Bank last week to Esquire Bank was one of those unexpected developments. Carey had told the IRB that he was trying to negotiate a loan from Signature. Instead, Hawthorne pivoted to get a $16 million advance at 13% from JDI Loans, part of a Chicago-based real-estate company. The loan was approved March 4 by federal bankruptcy judge Deborah Thorne and has to be paid back in full by early July.

This meant Hawthorne employees who missed two paychecks, workers who are waiting to prepare the racetrack and horsemen whose purse earnings bounced are expected to be made whole before other creditors have their day in Thorne’s Chicago court.

“It’s a very tense time, and we feel like we’re on a slippery slope potentially, and we can start feeling rain,” Illinois Thoroughbred Horsemen’s Association executive director David McCaffrey told the IRB. “But hopefully, we’re encouraged. Tim Carey ... said terrific things, and we appreciate his commitment to racing, because they could just sell the place and send it into chapter 7, and racing would implode. This is a four-month lifeline as we see it, and we’re appreciative of that, and hopefully it comes to fruition that a buyer comes who can develop the casino. Right now we are on the edge, and everyone knows it, and it’s very scary.”

Hawthorne was authorized in 2019 to build a casino on its property, and most of the existing grandstand was torn down to make way for it. Even though Carey promised the IRB time and again that investors’ money for the casino was just around the corner, he never got specific, and it never materialized.

Without the casino, Hawthorne’s revenue stream trickled to a comparative drip. Its debts soared to between $100 million and $500 million, according to its first court filings when it formally declared itself bankrupt Feb. 27.

The 20 biggest creditors who are owned more than $37.8 million include the digital platform Fantasy, The Stronach Group, Churchill Downs Inc., the New York Racing Association, seven other racetrack operators and the Horseracing Integrity and Safety Authority. More than 6,000 creditors with accounts going back two decades were listed on one court document.

Hawthorne’s financial trouble reached a crisis point Jan. 26, when the IRB suspended the track’s harness-racing license. The last three weekends of the standardbred season were canceled, and the racecourse has been in limbo since.

“I just don’t have any faith that we’re going to get back there in November to race,” Illinois Harness Horsemen’s Association executive director Tony Somone told the IRB. “As an association we’re out of money soon. If we are able to get this bankruptcy money going forward to fund our association, it’ll carry us into the fall, but not much before that. If we don’t get the money, I really don’t know what happens.”

Board member Patricia Saccone asked Carey, Chatz and Campbell six times about contingency plans if the bankruptcy process does not result in a positive turnaround.

“There hasn’t been any reluctance on it as far as the judge is concerned,” Carey said.

“We will go back and ask the judge for that,” Campbell said.

“The plan is to continue racing, period,” Chatz said. “That’s the plan. We don’t see any impediments to that currently.”

Hawthorne’s Thoroughbred season is scheduled now to go from April 19 to Nov. 1 with live racing Sundays and Thursdays.

Fairmount Park in Collinsville, a suburb of St. Louis, will get the jump this year in Illinois. With the deeper pockets of owner Accel Entertainment, a temporary slot-machine casino already running and the addition of table games next month, Fairmount’s 57-day Thoroughbred season of Tuesdays and Saturdays goes from April 14 to Oct. 27.

In the meantime, Block expects training will start at Hawthorne next week for upward of 180 horses and hopes there will be at least 300 by opening day.

“Trucks will be in on Friday, and hoping (the dirt-track installation) gets in full swing in earnest on Friday,” Block said. “Hopefully we’ll have it down by Sunday. We’re hoping for a Monday or Tuesday beginning of training. That’s way behind schedule, but that’s what it is.”

Horse Racing Nation covered the IRB meeting by watching a live video stream.