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Hoosier Park Consideration
6 Months Ended
Jun. 30, 2011
Hoosier Park Consideration  
Hoosier Park Consideration

NOTE 3 — HOOSIER PARK CONSIDERATION

In accordance with the sale of the Company's 62% ownership interest in Hoosier Park, L.P. ("Hoosier Park") to Centaur Racing, LLC ("Centaur"), on March 30, 2007, the Company received a promissory note issued, jointly and severally, by three individual investors in Centaur (the "Note") in the amount of $4.0 million, which accrued interest at a rate of 8.25% per year. According to the terms of the Note, interest was due and payable in one lump sum upon maturity of the note, which was March 30, 2010. As of June 30, 2011, approximately $5.1 million of principal and interest is outstanding in accordance with the Note. The Partnership Interest Purchase Agreement documenting such sale to Centaur also includes a contingent consideration provision whereby the Company is entitled to payments of up to $15 million on the date which is eighteen months after the date that slot machines are operational at Hoosier Park. During June 2008, Hoosier Park commenced its slot operations, fulfilling the terms of the contingency provision.

On March 6, 2010, Centaur and certain of its affiliates filed Chapter 11 bankruptcy petitions in the United States District Court for the District of Delaware. As of June 30, 2011, the Company had not received the contingent payment, and has determined that collectability of amounts due under the contingent consideration provision is not reasonably assured and, therefore, has not recognized the amounts due under the Partnership Interest Purchase Agreement.

On February 1, 2011, the Company entered into a settlement agreement with Centaur and its affiliates whereby, subject to the conditions to the implementation of Centaur's reorganization plan being met, the Company will receive a cash payment of $8.5 million as a settlement for the amounts owed to the Company pursuant to the Note and contingent consideration provision of the Partnership Interest Purchase Agreement. On February 18, 2011, the U.S. Bankruptcy Court ("Court") in Delaware approved Centaur's reorganization plan and the Company's settlement agreement with Centaur. As of June 30, 2011, certain conditions to the implementation of Centaur's reorganization plan remain outstanding. Amounts received in excess of the Note balance and accrued interest will be recorded as a gain on the sale of Hoosier Park once realized.