Centaur LLC, the Indianapolis gambling company seeking to build a $425 million racetrack casino in Lawrence County, has announced that its two Pennsylvania divisions have filed for bankruptcy protection, a step necessitated by Centaur's own missteps and the difficult borrowing environment.

Centaur PA and Valley View Downs LP both filed for Chapter 11 bankruptcy protection Wednesday in U.S. Bankruptcy Court, District of Delaware, and both filed several related motions yesterday, as well. A meeting of creditors has been scheduled for Dec. 10.

Centaur took the bankruptcy action, at least in part, because it needs to reserve $50 million to pay the one-time license fee for a slots license, which it doesn't yet have. It has a racing license from the Harness Racing Commission, but a decision on whether to grant a slots license is still up to the Pennsylvania Gaming Control Board.

Centaur's $50 million line of credit might have disappeared beneath the weight of other debt obligations had it not filed for bankruptcy protection, said Centaur Chief Financial Officer Kurt Wilson. The dual filings allows Centaur to "restructure its capital base," a process complicated when Centaur's original financiers pulled out following Centaur's failure to make a key interest payment last year, Mr. Wilson said.

"From that point, it is a combination of [factors] that puts us in this stalled position," he said. The credit market "closed down, virtually shut down, almost immediately after that," and thawed only this spring.

The state Harness Racing Commission has given Centaur officials until September 2010 to build the harness racing track and start live racing in Lawrence County, said spokesman Justin Fleming.

That delay was granted in August 2008, after Centaur began running into financial problems, he said. If Centaur finds it's having trouble meeting the deadline, it could seek another extension from the commission. Mr. Fleming said he didn't know how the three-member Harness Commission would react to a request for another extension.

But Centaur hopes it won't need one. "We are committed to our race date," said Joe DeRosa, Valley View's general manager of gaming.

State Rep. Chris Sainato, D-Lawrence, said he was confident that Centaur would build the racetrack casino in Lawrence County. "We need it for Western Pennsylvania and the whole region, not just for Lawrence County," he said yesterday, noting that it could bring 1,000 or more jobs, between construction work and permanent jobs at the track and the slots casino. Adding table games will bring even more jobs, he said.

Mr. Sainato said he talked yesterday to Centaur officials.

"They've been trying very hard to get financing and have been getting some positive responses," he said. "They're not there yet, but things are better than they have been. Centaur is still committed to Lawrence County."

Centaur, meanwhile, said it had been in talks with the harness commission, and said the commission still supports the Valley View Downs project.

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