Hawthorne Race Course files for Chapter 11 bankruptcy

Hawthorne Race Course, the oldest horse racing course in Northern Illinois, filed for Chapter 11 bankruptcy in Chicago this week.

The owners of the racecourse announced the filing on Friday in a bid to save horse racing in Illinois while restructuring the company's debt and attracting a buyer or investor to recapitalize and restart operations at the racecourse.

The reorganization plan is said to preserve 250 jobs while prioritizing paying accrued purses to the Illinois Horsemen's Association, including thoroughbred owners and trainers, as well as payroll for track employees.

"This is a difficult day for Hawthorne and for my family which has owned Hawthorne for four generations over 117 years, but filing for reorganization is the right thing to do for the Illinois horsemen and for our employees and their families," said Tim Carey, president and CEO of Hawthorne Race Course.

The casino expansion law passed in 2019 allowed the racecourse in Stickney, Illinois, to operate a racino, with casino-style gambling machines and table games. However, according to Carey, rising costs and regulatory fees made it difficult to elevate its new businesses while simultaneously working to keep the racecourse afloat.

"The Debtors have faced substantial financial hardship in recent years, driven by challenges affecting the horse racing industry in Illinois, initially due to the expansion of casino gaming and later compounded by an increasingly competitive sports betting market, as well as other industry-wide issues, including rising costs and increased regulatory fees related to simultaneously running a troubled business and building a new business," he said.

Carey said the bankruptcy filing became a required step after Hawthorne's relationship with its lender and other creditors fell apart – leading to setbacks, including the inability to continue the harness racing season.

The declaration noted there is "substantial interest from potential buyers and recapitalization partners" due to the opportunity to maximize Hawthorne's value by completing the building and opening of the racino.

Owners of Hawthorne Race Course said they will work with financial advisor Getzler Henrich and Associates to request the federal court's approval for debtor-in-possession financing to assist with the restructuring process. They hope to appear in federal bankruptcy court in Chicago next week to secure approval for the new financing.

Hawthorne is one of the two last remaining race courses in Northern Illinois, along with Collinsville.