Saturday Sept 3, 2011
Bond holders agree to a four month extension on the $538,000 payment due this past Thursday.
So class, why did the bond holders agree to do this? Because if they foreclose at this point they still won't get paid and it is clear the present operating business plan does not work. The horse race track simply does not make money.
Now the strategy is to convince some Las Vegas casino operators (who are not in the best shape themselves) to buy into the track. This would give the track some funds while they attempt to persuade state legislators to allow slot machine and or table stakes gambling. The latter seems a very long shot to me.
As I said in class, this is the same predicament that the Atlantis Resorts in the Bahamas and Dubai are experiencing. Cash flow will not support operations much less cover debt service. An entirely new plan needs to be adopted. But frankly, I don't see much light at the end of this tunnel.
These two examples demonstrate my point that the economy will re visit the March 2009 lows in the stock market because both business and governments are overloaded with debt.
Professor Elam 
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