Argosy Owner Files Chapter 11 in Iowa

Claiming it will lose $110 million if the Argosy Sioux City riverboat is forced to close by July 1 deadline, as ordered by the Iowa Racing & Gaming Commission, owner Belle of Sioux City LP, a subsidiary of Penn National Gaming, recently filed Chapter 11 bankruptcy. Belle officials listed liabilities of $110 million to 100-199 creditors.

Belle of Sioux City LP, a subsidiary of Argosy Sioux City riverboat casino owner Penn National Gaming, recently filed for Chapter 11 bankruptcy protection. The move is an effort to stop the Iowa Racing & Gaming Commission’s order to shut down the riverboat by July 1. A hearing will be held Friday in U.S. Bankruptcy Court in Reading,  Pennsylvania.

Iowa Attorney General’s Office spokesman Geoff Greenwood said the office is reviewing the documents and declined further comment.

Belle officials argued if the boat is forced to close, the company will lose its $110 million investment in Sioux City, suffer other losses that are “catastrophic, unrecoverable, and unprecedented in the gaming industry” and be forced to lay off 280 employees, “before ever having its day in the court.” The stated the IRGC’s shutdown order should be automatically stayed until Penn’s legal proceedings against the IRGC are resolved. Among them is a judicial review case in Polk County District Court, in which Argosy is seeking to overturn a series of IRGC actions that led the commission in April 2013 to award a gaming license for the $128.5 million Hard Rock Hotel & Casino Sioux City, scheduled to open downtown this summer. Final arguments in the case are scheduled to begin September 26.

Belle argued they should be permitted to continue operating their business “while the courts decide whether the IRGC has the power to take away the license of a fully compliant operator that is undisputedly in good standing, and simply hand that license over to another operator of its choosing that might earn more revenue for the state and MRHD.” Missouri River Historical Development was the nonprofit partner of the Argosy until it refused to agree on a contract with Argosy. As a result the commission refused to renew the Argosy license, arguing it did not have a nonprofit partner, as required by Iowa gaming law. Meanwhile MRHD became the nonprofit partner of Hard Rock.

In its Chapter 11 petition, Belle officials estimated liabilities of $1-$10 million, with 100-199 creditors. MRHD, the city of Sioux City and Woodbury County are the three largest unsecured creditors. Belle owes $1.6 million in revenue sharing payments to MRHD, representing the 3 percent of gross revenues that Argosy has withheld due to its breach-of-contract lawsuit against the group. Belle also owes $142,432 to the city and $19,986 to the county.

MRHD President Mark Monson said the board will hold a special meeting on Monday to discuss the effect of the riverboat’s bankruptcy filing.