May 14, 2012
Suffolk OTB Files for Chapter 9 Bankruptcy Protection;
State Authorization Granted As Part of Recent Budget Passage
On Friday, May 11, 2012, Suffolk Regional Off-Track Betting Corporation filed a petition for modification of its debts under Chapter 9 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of New York, Central Islip Division.
U.S. Bankruptcy Court Chief Judge Carla Craig dismissed Suffolk OTB’s original March 18, 2011 petition this past December, ruling that Suffolk OTB required State authorization in order to proceed with Chapter 9 bankruptcy.
Suffolk OTB received State authorization as a result of the passage of the New York State 2011-2012 budget. The bill also allows Suffolk OTB access to its capital acquisition fund for operational purposes.
Handle for this year’s Kentucky Derby was the highest in the last five years, with a 25% increase over the 2011 Run for the Roses. After several years of decline, the handle numbers for the entire day were up by 3%: $2.23-million this year versus $2.16-million for 2011.
Suffolk OTB President and CEO Jeffrey A. Casale said that the new business model developed over the past year is responsible for the strong start to the 2012 racing season. “With the successful filing of Friday’s Chapter 9 petition, Suffolk OTB will be in the position of completing its reorganizational plan. That means a stronger Suffolk OTB and increased support for Suffolk County, New York State and taxpayers.” Casale said that Suffolk OTB will continue to make surcharge payments to Suffolk County while under bankruptcy protection.
The case now goes to the Chief Judge of the United States Court of Appeals, who will select a bankruptcy judge in the Second Circuit to hear the case.