NEWS
NYRA bankruptcy hearing postponed
Posted: Thursday, December 27, 2007 9:48 AM
JOSEPH BRUNO
Photo courtesy of SenatorBruno.com
by Paul Post
A confirmation hearing that might have resolved New York Racing Association’s bankruptcy has been postponed until January.
The proceeding, in United States Bankruptcy Court, was scheduled for today, but state lawmakers have not reached a Thoroughbred franchise agreement yet with four days to go before NYRA’s contract to run Saratoga Race Course, Belmont Park, and Aqueduct expires.
The bankruptcy reorganization is based on NYRA’s non-binding agreement with Governor Eliot Spitzer that has drawn strong opposition from Senate Republicans.
“After almost three years of discussing the future of horse racing it should not be difficult to get a result,” Senate Majority Leader Joseph L. Bruno, a Republican, said recently. His district includes Saratoga Springs, New York.
“What would be difficult is to simply extend NYRA’s franchise for another 30 years, as the governor has proposed,” he said.
On December 22, NYRA announced that more than 97% of its creditors approve of its Chapter 11 reorganization plan. Creditors had until last Friday to vote on the proposal.
“With the court-approved voting process concluded, NYRA has satisfied yet another requirement for confirmation of its plan,” NYRA Chairman C. Steven Duncker said. “The extension of NYRA’s franchise and the exit from Chapter 11 remain subject to New York State and court approvals.”
Staff for Spitzer, Bruno, and Assembly Speaker Sheldon Silver, D-Manhattan, are expected to meet today for another round of franchise negotiations.
“We don’t believe there are any differences that exist that we can’t resolve to come to an agreement,” said Scott Reif, a Bruno spokesman.
“Discussions are ongoing,” said Jeff Gordon, a spokesman for state Budget Director Paul Francis, one of the state’s key negotiators.
Leaders could reach an agreement this week, but it wouldn’t become official until lawmakers return to Albany early next month to begin the 2008 legislative session. A final franchise agreement requires approval of both the governor and legislature.
NYRA filed for bankruptcy protection on November 2, 2006, has debts totaling $364-million, and is expected to have $27.2-million operating losses for 2007, about $8-million of it directly related to bankruptcy. On September 4, Spitzer said he wanted to keep NYRA in place for 30 more years. Under his memorandum of understanding with NYRA, the state would give NYRA $125-million to pay off creditors and forgive NYRA’s $75-million state debt.
The proposal also includes a plan for NYRA to pay off its $95-million debt to pension funds.
“Every employees’ pension fund will be fully funded,” NYRA President and Chief Executive Officer Charles Hayward has said.
In turn, NYRA would give ownership of the racetracks to the state, settling a contentious land claim. The tracks have a combined value of more than $1-billion.
Bruno, however, says the Spitzer-NYRA plan is a continuation of the status quo.
“What’s going to be different?” he said. “NYRA continues to bleed money.”
He’s called for a resignation of the full NYRA board. NYRA may continue running the on-track racing product, but he wants other groups to control other parts of the franchise such as simulcasting, tote operations, marketing, and real estate development.
Bruno also wants gaming at Belmont and Aqueduct, which he said is needed to raise purses and breeders’ funds sufficiently. Current legislation allows for gaming at Aqueduct only. In addition, he’s called for creation of a new public authority to conduct racing.
Until leaders reach some type of compromise, NYRA’s bankruptcy will apparently go unresolved. More importantly, the future of racing beyond December 31 remains up in the air with NYRA’s current franchise set to expire on Monday.
Paul Post is a New York-based Thoroughbred Times correspondent
