Not-So-Small Business Bankruptcy In Indiana: Hoosier Park

When it comes to small business bankruptcy in Indiana, I always begin with the hard questions.

In the first place, I know something the owners of the business who are seeking Indiana bankruptcy help typically don’t, or at least something they haven’t faced up to: They will probably be forced to file individual bankruptcy in Indiana along with their business bankruptcy. Even if that turns out to be a false assumption on my part, my opening question will make matters pretty clear, pretty fast:

Would it make more sense in the long run to liquidate your business altogether and start over with a new one (Do you have the capital to do that?) or to reorganize your current business?

If, around the time of my meeting the clients, there’s been a well-publicized bankruptcy of some corporation, I like to use that news as a model for the discussion with Indiana small business bankruptcy clients facing financial difficulties. When Freight Masters Systems filed Chapter 11 bankruptcy earlier this year, I used that company as a guide to help small business owner clients decide whether to file Chapter 7 bankruptcy, to file under Chapter 13 bankruptcy law in Indiana, or whether to select Chapter 11 filing.

As of last week, I’m able to use the example of Centaur LLC, parent company of Hoosier Park casino and horsetrack in Anderson, Indiana (where one of the Mark Zuckerberg bankruptcy law offices is located). That company just filed Chapter 11 bankruptcy.

It appears Centaur’s answer to my hard question was that it makes more sense to reorganize than to fold and start over, as Centaur executives reported to Channel 6 News that “normal operations will continue”.

As a debt consolidation lawyer providing bankruptcy services in Indiana, I need to remind blog readers what choosing Chapter 11 does not mean, which is that there are only mild financial issues with the company. In fact, Centaur missed a #13.4 million payment on more than $400 million in debt (hardly small stuff!).

What Centaur’s choice does mean is that the company and its lenders have agreed to work together to keep the business going. There will be quite a bit of work involved, because detailed reporting to the bankruptcy court will need to be done every month, in order to demonstrate that everyone is following the Chapter 11 reorganization plan. The goals are three:

Keep the business alive
Pay the creditors over time
Treat all parties as fairly as possible

So, whether it involves small business bankruptcy clients in Anderson, Indiana, or clients of any of the Indianapolis, Bloomington, or Columbus bankruptcy lawyers who work in the Mark Zuckerberg offices in those towns, the answers to the hard questions need to start with YES:

Yes, we know a Chapter 11 reorganization plan will require lots of time and effort.
Yes, most of our debt is unsecured, so the creditors can’t be satisfied by taking back assets.
Yes, we can demonstrate to the bankruptcy judge that all parties will be better off by keeping the business running.

If the answers are in the “yes” column, just as with Hoosier Park, Chapter 11 might be just the ticket for a small business bankruptcy in Indiana!