Hawthorne Racecourse, the only surviving Thoroughbred racetrack on the once thriving Chicago circuit, has filed for bankruptcy, the track’s owners said in a press release, and will reorganize in the hopes of reversing the track’s fortunes.
The Chapter 11 bankruptcy filing follows the revocation of the track’s harness license in late January by Illinois regulators due to unpaid bills. Hawthorne, located in Stickney and owned by generations of the Carey family, runs both a harness meet and a Thoroughbred meet each year, but both have struggled for years.
In the press release, the track said that the goal of the bankruptcy filing would be “to attract a buyer or investor willing to recapitalize Hawthorne and restart operations of the racecourse while maximizing recovery to the company’s creditors.” The track has retained the financial firm Getzler Henrich & Associations as advisers.
Illinois legislators granted Hawthorne the ability to open a casino at the track in 2019, but the track’s management has been unable to secure financing to build it. The track’s grandstand was partially demolished in 2020 to make way for construction of a casino, but no work has followed, and companies that performed some of the work have placed liens on the property.
At the same time, many racetracks across the company stopped offering the track’s races because of unpaid bills.
“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, the president and chief executive officer of the track.
Hawthorne was granted 63 live Thoroughbred dates for this year but the problems during its harness meet introduced grave uncertainty in the Thoroughbred community that the meet would be held this year. It was scheduled to start on March 29.
David McCaffery, the executive director of the Illinois Thoroughbred Horsemen’s Association, said on Friday that the bankruptcy filing may provide a “lifeline” for Hawthorne, noting that the company did not file under Chapter 7 of the bankruptcy code, which would be a liquidation.
“Obviously things have to happen, a lot of things have to happen, but if this was Chapter 7, it would be over-over,” McCaffery said.
The bankruptcy filing says that the track will seek debtor-in-possession financing, which would allow the track to obtain loans that would assist in the restructuring process.
McCaffery said that he was informed late on Friday that the court date to approve the debtor-in-possession financing has been scheduled for Monday. Hawthrone has lined up a loan of approximately $15 million, McCaffery said he was told by track management, and if the financing is approved, Hawthorne would immediately use part of that money to convert the current Standardbred surface to a Thoroughbred surface.
Chris Block, the president of the ITHA, said on Friday afternoon that a quick approval of the financing could mean that the track will hold a Thoroughbred meet this year.
“I’m cautiously optimistic,” Block said. “It might not start on March 29, what with having to get a lot of horses here, but maybe sometime later than that.”
Approximately 200 Thoroughbred horses are on the grounds, McCaffery said. They have stabled at Hawthorne throughout the winter.
The filing says that Hawthorne currently employs 250 people. Hawthrone also provides residences for up to 500 backside employees during the year, according to the filing.
The 2019 legislation allowing for casinos at Hawthorne and Arlington Racecourse northwest of Chicago was supposed to provide a lifeline to Thoroughbred tracks in the area. Instead, Arlington’s owner, Churchill Downs Inc., turned down the ability to open a casino, citing dissatisfaction with the tax structure, and sold the track to the Chicago Bears in early 2023.
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