Indianapolis Downs Proactively Files for Chapter 11 Bankruptcy
Like many companies in the current economy, Indianapolis Downs, LLC recently discovered that it was operating with a debt burden that it could no longer meet. Though the operator of the Indiana Downs horse track and Indiana Live! Casino had begun proactively attempting to restructure its debt with lenders and vendors, it ultimately decided that formal restructuring under Chapter 11 of the bankruptcy code was one of several steps necessary to complete in order to ensure its long-term success.
Chapter 11 "Reorganization" Bankruptcy
Chapter 11 bankruptcy is usually filed by companies or partnerships looking to restructure their debt in order to keep their finances afloat while paying back creditors over time. Prior to filing for Chapter 11, debtors must obtain credit counseling from an approved agency and file a petition with the appropriate bankruptcy court. Then, debtors must submit a plan of reorganization which discloses relevant assets, liabilities and other pertinent information about the debtor's situation that the court will need in order to make an informed decision when it ultimately approves or rejects the plan.
The plan must specify how each kind of debt will be addressed over time. Creditors whose rights or rights to payment would be modified under the debtor's plan vote on its contents. The court then conducts a hearing to determine whether or not to approve the plan. It should be noted that after a certain period of time, creditors may file a competing plan. For this and many other practical reasons, those contemplating Chapter 11 should seek the advice of an experienced attorney as soon as possible. Failure to do so may limit a debtor's opportunity to restructure debt on its own terms.
