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Craig D. Robins, Esq. New York Bankruptcy Attorney, Longisland bankruptcy attorney

“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”

Craig D. Robins, Esq.

Chapter 9 Bankruptcy for New York City Off-Track Betting Corp

Posted on Wednesday (September 2, 2009) at 12:15 pm to Current Events

New York City Off-Track Betting Corp Will be Filing for Chapter 9 BankruptcyWritten by Craig D. Robins, Esq.

Sometimes even municipal entities need to obtain bankruptcy relief.  New York Governor David Paterson signed an executive order yesterday that will enable New York City Off-Track Betting Corp to file for bankruptcy as a municipality.

OTB will be filing for Chapter 9 relief.  This is the chapter of the bankruptcy code that applies to municipalities and enables them to restructure and reorganize their debts through a bankruptcy proceeding.

Chapter 9 can be contrasted with Chapter 7, which is the type of bankruptcy consumers usually file to eliminate credit card debt, and Chapter 13, which is the other type of consumer bankruptcy, which lets consumers save their homes with a bankruptcy payment plan.  There is also Chapter 11, which is a plan of reorganization usually used by businesses.

The OTB was set up as a public benefit corporation in 1970 to raise money from pari-mutuel betting for New York City, the state and the horse-racing industry. In pari-mutuel betting, all bets of a specific type are pooled with the house subtracting its “take” before paying the winners.

However, despite taking more than $1 billion in bets every year, the OTB has not been able to cover its operating costs for quite some time and has accrued liabilities of $220 million.

Under Chapter 9, OTB will overhaul its business model, renegotiate with its unions, upgrade its technology and end some of its leases.

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Craig D. Robins, Esq.
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