Indianapolis Downs looks to halt $600 million suit against CEO, trusts

By Caroline Salls

Pittsburgh, May 10 - Indianapolis Downs, LLC filed a lawsuit Tuesday in an effort to suspend pending litigation seeking $600 million in damages against its chief executive officer and the trusts that own the Indianapolis Downs debtors, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Specifically, the company said it is asking the company to stay or grant an injunction against a pre-bankruptcy lawsuit filed by its management company Power Plant Entertainment Casino Resorts, Indiana LLC and Power Plant's corporate affiliates.

The Power Plant suit was filed against Indianapolis Downs' chairman and CEO Ross J. Mangano and the three trusts that own the debtors. Mangano is the trustee for those trusts.

Indianapolis Downs said the lawsuit involves a dispute related to a development, financing and management agreement with Power Plant, which the company is trying to reject as part of its bankruptcy case.

Even though the Indianapolis Downs debtors are not formally named as defendants, the company said the Power Plant lawsuit would deplete property of its bankruptcy estates and interfere with its reorganization.

The company said Power Plant is looking to exercise control over the estate in light of Indianapolis Downs' contractual indemnification obligations to Mangano and the trusts.

Indianapolis Downs, a Shelbyville, Ind., racetrack, off-track betting and gaming company, filed for bankruptcy on April 7. The Chapter 11 case number is 11-11046.

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