Vendors
Dear Valued Vendor:
On December 3, 2009, New York City Off-Track Betting Corporation (“NYC OTB”) announced that it has filed for adjustment of its debts under chapter 9 of the United States Bankruptcy Code. The purpose of this filing is to provide NYC OTB with protection from its creditors while it develops and negotiates a plan for adjusting its debts. Please be assured that the chapter 9 filing does not mean that NYC OTB is going out of business. In fact, it will be business as usual for most of our operations during this time.
The adjustment of debts of NYC OTB under chapter 9 will give us the time and protection necessary to further develop, obtain legislative approval of and implement a new business plan that we expect will help sustain the viability of NYC OTB well into the future. This is expected to result in a stronger, more financially-secure organization—one that is better able to serve its customers and work with you.
Our relationships with our vendors and suppliers are very important to us. The chapter 9 process offers several tools intended to protect the interests of our key vendors to ensure that they remain valued business partners both during and after this process, as well as to protect our interests. It is important that you understand the following:
- The Bankruptcy Code encourages suppliers to continue to do business with a chapter 9 debtor by granting priority status to payments for goods received and services rendered after the filing date of the chapter 9 case. This means that NYC OTB expects to pay suppliers in cash in full according to ordinary trade terms for all goods and services provided after December 1, 2009.
- A significant percentage of key supplier relationships are governed by contractual relationships, and those key contracts are expected to be assumed as part of the reorganization process, with any pre‐bankruptcy amounts owing paid in full at the time of assumption.
- The Bankruptcy Code’s automatic stay does not permit collection actions against us while we are in chapter 9. The Bankruptcy Court confirmed that restriction in an Order dated December 8, 2009, a copy of which is enclosed with this letter. Accordingly, we do not expect to be in a position to pay amounts owing to you as of December 1, 2009 as a condition to our ability to continue to do business with you, and any request that we do so might be viewed by the Bankruptcy Court as violating the automatic stay and the Bankruptcy Court’s order.
Our goal is to keep you informed as we go through the chapter 9 process. If you have questions about this letter or any future correspondence, we encourage you to visit our website dedicated entirely to the chapter 9 case and the new business plan, www.nycotbfacts.com, or contact your regular account representative at their number or our general number 212-221-5200.
In addition, all documents filed with the Bankruptcy Court are available for inspection via the PACER system, which may be accessed on a subscription basis at the following internet address: https://ecf.nysb.uscourts.gov/.
Please be assured that NYC OTB is working diligently to pursue a favorable outcome for the company and our vendors and suppliers, and we hope to have a mutually beneficial business relationship going forward.
We thank you for your support and look forward to continuing to grow our ongoing partnership as we work to emerge from this process a much stronger organization than before.
Sincerely,
Robert Garry
CFO