Less than two years after opening a casino, the Miami Jai-Alai facility filed for bankruptcy protection as its parent company fends off a foreclosure from the holder of an $87 million loan.
In a stock filing Monday night, Florida Gaming Corp. disclosed the Chapter 11 filing, saying the terms of a pending sale would essentially wipe out the company.
Last year, Florida Gaming agreed to sell itself to a New York-based casino company, Silver Entertainment.
The price, including debt: $115 million. But Florida Gaming’s agreement with lenders requires it to pay out $114 million at the time of the sale, plus a penalty based on how many slot machines its rival at the Hialeah Park racetrack managed to get approved and operational.
Hialeah Park opened its casino last week with 882 slot machines, and that means an additional $6 million toward lenders, according to Florida Gaming’s securities filing.
The bankruptcy filing is the latest twist in a messy fight involving the aging jai-alai fronton’s effort to become a thriving casino.
Its debt is held by ABC Funding, which has ties to a private-equity fund with interest in a Las Vegas casino.
Florida Gaming is suing both companies over its debt, and had a court impose a receiver over its operations as the 2012 suit dragged on without sign of a resolution. ABC is suing to foreclose over missed loan payments. The Miami casino opened Jan. 23, 2012, and the loan in dispute paid for adding the gambling facility.
Luis Salazar, a partner with Salazar Jackson in Miami, represents Florida Gaming in the bankruptcy case but declined to comment Monday.
Florida Gaming owns frontons in Miami and Fort Pierce. The bankruptcy filing involves Florida Gaming and its subsidiaries, including the Fort Pierce and Miami facilities.
Despite the drama with creditors, gambling has meant a windfall for the company.
Its second-quarter earnings report, also issued Monday, showed Florida Gaming posting a $4 million operating profit for the three months that ended June 30. Casino revenues in those 90 days hit $19 million.
Overall, the company posted a $22 million loss thanks to a paper charge related to an obligation to the debtor tied to the pending sale.
In a court filing, Daniel Licciardi, a Florida Gaming executive vice president, wrote: “Miami Jai-Alai is now thriving and is a success by every measure but one: its relationship with its lender.”