Centaur, North East, H. Steve Norton, Massachusetts connections

The article at the bottom, addressing Centaur's Indiana bankruptcy, has an interesting history and Massachusetts connections --

H. Steven Norton Resigns from Diamondhead Casino - cbl

By citybizlist Staff

LARGO, Fla. -- Diamondhead Casino Corp. (OTCBB:DHCC) has accepted the resignation of H. Steven Norton from its board of directors, according to an SEC filing.

Norton's letter, which was attached to the filing, indicates that he resigned because the board felt that he had a conflict of interest due to the fact that his son, Mark Norton, is an executive with the CanCan casino project in D'Iberville, Miss.

Diamondhead Casino is developing a casino resort on the Bay of St. Louis in Diamondhead, Miss. Founded in 1988 and headquartered in Largo, Fla., the company owns approximately 404.5 acres of unimproved land to develop the resort.

H. Steve Norton was elected as a director of Diamondhead in 2002. Since 1998, he has served as President and CEO of Norton Management, Inc. Norton also serves as a Director of Centaur, Inc., a privately held company which owns a casino in Central City, Colo. Norton is also a Director of Colorado Casino Resorts, Inc. in Cripple Creek, Colo. and North East Resorts, Inc., a privately held company pursuing gaming in the state of Massachusetts.

As citybizlist reported last week, Diamondhead announced that it had entered into a Letter of Intent with Phoenix Gaming and Entertainment, LLC. In the letter, Phoenix proposes to purchase 25 acres of land for $1 million per acre to be used, in part, for the construction of a casino. Diamondhead has agreed to give Phoenix an additional 15 acres of land to be used for the construction of roadways and right-of-way requirements, greenery, buffering, on-site mitigation and/or the footprint for a possible parking garage.

Diamondhead's stock price closed at $0.95 on December 17.


Potential Churchill Downs-Centaur settlement in the works

LOUISVILLE, Ky. -- Churchill Downs Inc. may be ready to settle its $15 million claim from Centaur, its former minority partner and the current owner of Hoosier Park in Anderson, Ind.

When Churchill sold Hoosier Park in 2007, it was to receive $15 million from Centaur if the track got slot machines within a certain time frame. The slot machine time requirement was met, but Centaur filed for bankruptcy last March.

In a filing Wednesday in U.S. Bankruptcy Court in Delaware, Churchill said it has negotiated “a fair and equitable” settlement with Centaur that has yet to be filed. The filing also stated objections to an already filed Centaur reorganization plan in the event that Churchill’s planned settlement isn’t filed or isn’t approved.


Churchill spokeswoman Julie Koenig Loignon declined comment, citing a company policy not to discuss pending litigation.


Centaur Chairman Rod Ratcliff said in a statement that he was optimistic about a settlement.


“Considering the longstanding relationship with Churchill Downs, I am confident this issue can be resolved amicably,” he said. “While it is disappointing the parties find themselves in this situation, unforeseen circumstances have brought us to this point. Complex and intertwined events beyond the parties’ control have contributed to the situation.”


The unforeseen circumstances include the recession, the company said a subsequent statement seeking elaboration.


In Wednesday’s bankruptcy filing, Churchill repeated arguments made in a Dec. 30 filing that Centaur’s proposed settlement plan would treat Churchill unfairly by giving certain creditors half of what they are owed, with a cap of $650,000. The cap means Churchill would get about 4 percent of its $15 million claim while other creditors in the same settlement class would get the full 50 percent.


Churchill is the largest creditor in that class of debtors, followed by Ames Construction at $1.28 million and Anderson City Utilities at $136,649, according to Churchill’s filing.


Churchill argued in the Dec. 30 filing that the proposed settlement violates the bankruptcy code requirement of equal treatment of debtors. While acknowledging that courts have some leeway in interpreting what is equal, “no court has permitted a disparity of treatment anywhere near the magnitude of that proposed” in the current settlement, Churchill’s objection said.

Separately, Churchill filed suit in U.S. District Court in Indianapolis on Nov. 24 against Ratcliff and two investors, Mike Raisor and R. Michael O’Malley. The three signed a $4 million promissory note, which carried interest of 8.25 percent per year, to Centaur, which ultimately assigned the collection rights to Churchill.

In the district court case, Churchill claims it is now owed $5.07 million. The promissory note contained an additional interest charge of 5 percent a year if payments were more than 10 days late.

Ratcliff said the promissory note is separate from the bankruptcy but that he hoped it could be settled “in tandem with the company’s restructuring.”

At the time of the 2007 sale, Churchill owned 62 percent of Hoosier Park and Centaur owned the rest of the track, which opened as Indiana’s first pari-mutuel racetrack in 1994 after Churchill built it. At the time, Ratcliff was a minority partner.

The track started its slots operation in June 2008 and Centaur borrowed heavily to pay for a $250 million state license fee.

At the time of the bankruptcy filing, Centaur blaming the economy and the license fee for contributing to the company’s situation.