$90 million bid made for bankrupt Hawthorne
by Neil Milbert
An aptly-named “stalking horse” is in pursuit of Hawthorne Race Course.
In bankruptcy court jargon, according to legalclarity.org: “A stalking horse bid is a pre-negotiated offer to buy a bankrupt company’s assets filed with a bankruptcy court to set a price floor before an open auction. The stalking horse signs a detailed asset purchase agreement specifying which assets and contracts it will acquire, what liabilities it will acquire and the purchase price. This agreement becomes the benchmark every other bidder must beat.”
Such an agreement — containing a bid of $90 million from ALLIMAC LLC of Wilmington, DE, to Hawthorne Race Course, Carey Heirs Properties, LLC, Suburban Down, Inc., and Post Time Catering, Inc. — was approved on Friday (June 26) by Judge Timothy Barnes in U.S. Bankruptcy Court for the Northern District of Illinois.
Carey Heirs Properties refers to the descendants of Thomas Carey, who bought the track in the Chicago suburb of Stickney in 1909; Suburban Downs is the track’s harness racing entity; and Post Time Catering encompasses its off-track betting parlors and food services.
But there is virtually no information about ALLIMAC.
“I googled it all over and can’t find anything except that they’re based in Delaware,” said the Illinois Harness Horsemen’s Association’s executive director, Tony Somone. “A lot of these companies will register as a LLC (Limited Liability Corporation) in Delaware so they can stay hidden. Apparently, whoever this is does not want anybody to know who they are at this point.
“Anybody who is a qualified purchaser can still bid.”
Hawthorne representatives said at a bankruptcy court appearance earlier in the week that the track has received non-binding overtures from more than 50 persons and entities.
ALLIMAC’s bid appears to be confined to the real estate rather than that of the land plus racing operation and license to operate a casino that was authorized by the Illinois Gaming Board in 2020. Despite innumerable assertions since then by Hawthorne president Tim Carey that he was on the verge of reaching an agreement with a partner to construct the racino, it never has been built.
Friday (June 26) was the deadline for submission of bids and Tuesday (June 30) is the deadline for submission of claims.
An auction, if necessary, will be held on July 13.
Hawthorne has notified the Illinois Department of Commerce and Economic Opportunity that it will terminate 290 employees if it is sold to a land developer rather than a buyer who wants to continue racing.
Confronted with a reported $138 million in outstanding debt owed more than 200 creditors, Hawthorne filed for Chapter 11 bankruptcy on Feb. 27.
As a consequence of the track’s financial instability, all 14 of its Suburban Downs harness dates in January and February were canceled and the Suburban Downs license was suspended by the Illinois Racing Board on Jan. 26. At last fall’s hearings the Racing Board authorized the January and February dates and a Nov. 6-Dec. 27 meeting.
Currently, the dual-purpose facility — the lone racetrack in the Chicago metropolitan area that once had seven operating — is conducting a thoroughbred meeting that is scheduled to run through Nov. 1. The meeting began on April 19, three weeks later than scheduled because of the financial turmoil.
But if Hawthorne is sold to a developer who wants it solely for real estate purposes, the thoroughbred meeting probably will come to a premature end and the Fox Valley harness meeting won’t be held.
