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Subsequent Events
12 Months Ended
Dec. 31, 2012
Subsequent Events [Abstract]  
Subsequent Events

15.SUBSEQUENT EVENTS 

 

In August 2012, North Metro Harness Initiative (“NHMI”) initiated litigation against the MHBPA and the Company seeking to be relieved of its obligations to supplement purses at Canterbury Park under its Purse Supplement Agreement with the MHBPA.  The Company believes the theories asserted by NHMI in its complaint against them are without merit, and the Company and the MHBPA have brought motions to dismiss NHMI’s lawsuit.  In addition, both the Company and the MHBPA have moved for an order compelling arbitration of the claims in NHMI’s lawsuit, which is the only remedy permitted by the terms of the Purse Supplement Agreement. The Company believes this litigation will be resolved without material impact on the Company’s financial condition and results of operations.

In November of 2012, NMHI gave notice of their desire to terminate a simulcast agreement with the Company that had been in place since February 2008.  This agreement allowed the Company to simulcast standardbred races at its facility and NMHI to simulcast quarter horse and thoroughbred races at its facility.  The termination of this agreement became effective February 19, 2013, and, as a result, the Company is not currently able to simulcast standardbred races at its facility.  However, the Company does not believe the inability to simulcast standardbred races will have a material, adverse effect on the Company.

 

Subsequent to December 31, 2012, the Company entered into multiple agreements with various vendors to both construct and put into service improved digital signage and customer relationship management software at the Racetrack in 2013.  These enhancements will total approximately $2,225,000.  The Company anticipates that some of these expenses will be paid for using a portion of the marketing payments received from SMSC (these payments are described in greater detail in Note 14 “Cooperative Marketing Agreement”).  The Company has an agreement in principle that a portion of the marketing payments received annually will be applied to capital expenditures supporting the purposes of the CMA.  The Company believes that unrestricted funds available in its cash accounts, funds generated from operations, and portions of marketing payments received from SMSC will be sufficient to satisfy these obligations.