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05/16/2012
Suffolk OTB Moving through Chapter 9 Bankruptcy Filing
Suffolk Regional Off-Track Betting Corporation filed for Chapter 9
bankruptcy protection in the Eastern District of New York on in March
of 2011, making it the second OTB company in New York to enter
bankruptcy in two years. New York City OTB (NYCOTB) claimed filed for
Chapter 9 protection in 2009.
The filing was made in federal bankruptcy court in the Eastern District of New York. The OTB board had previously Chapter 9 filing approval from the Suffolk County Legislature.
Chapter 9 bankruptcy allows municipalities to reorganize rather than liquidate. The term municipalities includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts.
Suffolk OTB filed for protection last year, only to have their petition thrown out by a Judge who declared it “unconstitutional and void.” However on March 30, 2012, Governor Cuomo signed into law the Suffolk OTB budget bill which put Suffolk OTB in a position to legally file for Chapter 9 bankruptcy protection.
According to the filing, OTB owes creditors more than $10 million. The OTB cited a number of contributing factors to its bankruptcy filing, including the legislative requirement to distribute certain percentages of its revenue to state and local governments, and to New York's horse racing industry.
Through its bankruptcy, Suffolk OTB hopes to develop a plan that would enable it to emerge from chapter 9 by reducing costs, improving operational efficiencies, expanding its business , and obtaining new debt financing to pay its existing creditors and to fund its operations and plans for growth.
The filing was made in federal bankruptcy court in the Eastern District of New York. The OTB board had previously Chapter 9 filing approval from the Suffolk County Legislature.
Chapter 9 bankruptcy allows municipalities to reorganize rather than liquidate. The term municipalities includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts.
Suffolk OTB filed for protection last year, only to have their petition thrown out by a Judge who declared it “unconstitutional and void.” However on March 30, 2012, Governor Cuomo signed into law the Suffolk OTB budget bill which put Suffolk OTB in a position to legally file for Chapter 9 bankruptcy protection.
According to the filing, OTB owes creditors more than $10 million. The OTB cited a number of contributing factors to its bankruptcy filing, including the legislative requirement to distribute certain percentages of its revenue to state and local governments, and to New York's horse racing industry.
Through its bankruptcy, Suffolk OTB hopes to develop a plan that would enable it to emerge from chapter 9 by reducing costs, improving operational efficiencies, expanding its business , and obtaining new debt financing to pay its existing creditors and to fund its operations and plans for growth.
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