Hawthorne declares bankruptcy

by Neil Milbert

Besieged by a plethora of creditors, Hawthorne Race Course filed for Chapter 11 reorganization bankruptcy on Friday (Feb. 27).

According to a Hawthorne press release: “The reorganization plan will prioritize paying accrued purses to Illinois horsemen as well as payroll for track employees while restructuring the company’s debt.

“The goal of the reorganization is to attract a buyer or investor willing to recapitalize Hawthorne and restart operations of the racecourse while maximizing recovery to the company’s creditors. Hawthorne will be working with financial advisor Getzler Henrich & Associates, LLC and requests the Federal Court approve debtor-in-possession financing to assist with the restructuring process.”

Hawthorne has been the only harness track in Illinois since 2016 after it collaborated with Arlington International Racecourse to persuade the Illinois Racing Board to deny dates to bankrupt Maywood Park and Balmoral Park.

Hawthorne, which is located in near southwest suburban Stickney, then became the only racetrack in the Chicago metropolitan area after Arlington’s owner Churchill Downs, Inc. shut down the thoroughbred showcase after its 2021 meeting to eliminate competition for the nearby Rivers Casino of which the Kentucky gambling conglomerate had acquired a 62 per cent interest.

In January, Hawthorne was scheduled to continue its Suburban Downs fall/winter harness meeting that began last November and was scheduled to continue through Feb. 15 for a total of 14 programs.

But there was no racing as a consequence of the family-owned track’s financial woes. First, Hawthorne failed to post the required surety bond before the Racing Board’s Jan. 1 deadline and then, after that issue was resolved, the Racing Board suspended the Suburban Downs license because of bounced checks to owners, trainers, and drivers.

Tony Somone, executive director of the Illinois Harness Horsemen’s Association (IHHA), has said that Hawthorne has issued more than $580,000 in bounced checks for payment of purses. And, according to Chris Block, president of the Illinois Thoroughbred Horsemen’s Association (ITHA), a number of thoroughbred owners, trainers, and jockeys have notified him that their accounts are inaccessible.

Compounding the track’s financial woes are unpaid simulcast bills totaling more than $1 million and an unpaid lien of $5 million for 2020 demolition work on the grandstand to enable Hawthorne to construct a still-unbuilt casino with slot machines and table games. The racino was approved by the Illinois Gaming Board under provisions of a 2019 gambling expansion bill approved by the state legislature and signed by the governor.

Because of the uncertainty surrounding the bankruptcy filing, Hawthorne’s March 29-Nov. 1 thoroughbred meeting now is shrouded in uncertainty as is the Nov. 6-Dec. 27 Suburban Downs harness meeting.

Hawthorne president/chief executive officer Tim Carey said he hopes to be financially able to conduct the thoroughbred meeting and gather the funds to reacquire some of its simulcast signals.

“We’ll know more [this week] after Hawthorne appears before a bankruptcy judge,” the ITHA said on its website. “To be clear, this is a plan not a certainty.”

Under Chapter 11 bankruptcy, usually the debtor remains in possession of the property and may continue to operate with court approval and borrow money. Creditors, whose rights are affected, may vote on the plan and the plan may be confirmed by the court if it gets the required votes and satisfies legal requirements.

Hawthorne employs more than 250 people with the longest-tenured employee spending 54 years at the track. Stable area residents live rent free — the population ranges from close to 300 to the neighborhood of 500 depending on the season.

“This is a difficult day for Hawthorne and for my family which has owned Hawthorne for four generations, over 117 years,” Carey said in announcing the bankruptcy filing, “but filing for reorganization is the right thing to do for the Illinois horsemen and for our employees and their families.”

Hawthorne is one of North America’s oldest racetracks. Its first thoroughbred race was held on May 20, 1891 and it added harness racing in the spring of 1970.

In 1895, racing was banned by the state legislature. Carey’s great grandfather, Thomas Carey, bought the track in 1909 and made three attempts to revive racing before the ban was repealed and the thoroughbreds returned in 1922.

The sports and gambling landscapes are vastly different in 2026 than they were in 1922.

In the press release, Tim Carey spoke of, “the challenges and headwinds Hawthorne has faced while attempting to continue its struggling operation while also supporting the entire harness racing industry in northern Illinois and launching a racino — a brick-and-mortar betting parlor at the racetrack.”