Hawthorne Race Course horsemen learned July 20 the bankrupt track almost certainly ran its last race the previous day, then heard there is no money to pay almost $1 million in purses earned in July and that they, their families and horses will have to vacate the backstretch by Aug. 31.
"We are just trying to get them a dignified exit," said Kevin Morse, attorney for the Illinois Thoroughbred Horsemen's Association, arguing for a longer transition period. "These are people who have had their world turned upside down."
About 500 humans and a like number of horses are on the backstretch for a race meeting scheduled to run through October as Hawthorne sought a buyer who would continue operations. Instead, the only bidder was a Delaware-registered company which intends to redevelop the suburban Chicago property.
To facilitate closure of the sale and realize the $90 million sale price to pay creditors, Hawthorne needs to hand over the property "free and clear," without the backstretch population. Horsemen argued they need more opportunity to relocate horses at a point in time when nearby tracks already have limited or no barn space and, lacking purse payments, they are strapped for operating funds.
"We raced July 5, July 12 and July 19," Morse said. "We have not been paid once for those dates. They're owed almost a million (dollars) in purse money. If they paid that, it might be easier to start relocation."
The track's attorney, Barry Chatz, replied basic operation of the backstretch facilities costs more than $500,000 a month and accused the horsemen of planning to continue training there while shipping to surrounding tracks to race.
"We have no money," Chatz said. "They are not paying us. They're here to use us as a storage facility. We need a clear statement that they can't train and they need to go."
Ironically, earlier in the bankruptcy proceeding, Hawthorne and a creditors committee accused downstate Fairmount Park of trying to prevent horsemen stabled there from shipping to race at Hawthorne.
Two of the creditors awaiting payment and the buyer have volunteered to provide funding to provide a longer transition. Judge Timothy Barnes expressed sympathy for the horsemen's compromise request to remain on-site until Sept. 15 but said he was forced to accept Hawthorne's calculations that available money would stretch only to the end of August.
"There are a number of moving parts here and I'm trying to stop them from moving," Barnes said, adding he has a legal and constitutional duty as he considers finalizing a sale, to consider "health and public welfare" in addition to financial issues.
"I would be very hesitant to use the power of this court to dispossess these people," he said of the backstretch workers. "There's more than economic issues here."
"My orders have to have some basis for compliance," the judge said. "I can't find the funds if you can't find the funds. If you can't find the funds, I can't approve Sept. 15."
The proceedings played out during a sometimes heated, day-long hearing before a packed courtroom. The audience included four young people who live on the backstretch.
The hearing was set to consider finalization of a sale at an earlier bankruptcy auction to the only bidder, who plans to redevelop the property. It devolved into technical wrangling among creditors about priority of payment from the $90 million purchase price, which is not enough to cover all of Hawthorne's debts.
By day's end, only a few issues remained to be settled before a final sale order can be issued.
Asked by the judge what happens next, Chatz said, "We will shut down. We will be doing our best to be sure our license is maintained."
He did not elaborate on the issue of licensure, which would have far-reaching implications for potential development of a new harness track in the south Chicago suburbs.
Hawthorne filed for bankruptcy protection Feb. 27, facing a mountain of debt, frozen bank accounts, and bounced checks. Its demise leaves the Chicago area without horse racing and Fairmount Park the only track still running in Illinois.
