An agreement has been reached between Churchill Downs Inc. and the Louisiana Horsemen's Benevolent and Protective Association to purchase the horsemen's legal claims against Fair Grounds, and a letter of intent was filed with track officials to purchase Fair Grounds.
The New Orleans Times-Picayune
reports CDI's proposal totals $45 million, with $33 million going to settle Fair Grounds debt with horsemen and another $12 million to pay off the track's other creditors. Horsemen have already agreed to the plan and Fair Grounds officials have been given a deadline of 4 p.m. Wednesday to sign off on the proposal.
Fair Grounds bankruptcy attorney Douglas Draper said track officials are "evaluating our options" before making a decision on the proposal. "There are things that we can live with and there are things that our troublesome...It doesn't mean this is the final deal."
In a statement released Tuesday morning, Fair Grounds president Bryan Krantz denied having any formal discussions with CDI, but said it "is our goal to do what is best for all of the people who have invested their time, money, and energy into making the Fair Grounds what it is today.
"While there are reports of potential suitors, our main focus is to remain owners and operators of the business we have given so much to make a success. In regard to Churchill Downs Inc., we have not had any formal discussions. We continue to talk to many different organizations as it relates to our reorganization plan and look to complete the process as quickly as possible."
If the proposal is accepted, Fair Grounds officials would not be able to negotiate with other prospective buyers for a set period of time.
A CDI spokesman said the company would not comment on its proposal "until we reach a point of substantial conclusion."
Fair Grounds has a Thursday deadline to file a reorganization plan with U.S. Bankruptcy Court. Last month, a judge ruled Fair Grounds owed horsemen $89.9 million for withholding video poker revenue over the past decade, which makes horsemen the track's largest creditor. Under its agreement with CDI, horsemen would settle for about 35% of the judgement.
"Just about everybody knows that there's a long-standing endeavor to bring the Fair Grounds matter to a satisfactory conclusion," said Oran Trahan, president of the Louisiana HBPA. "At this time, it does not appear to be in anybody's interest to publicly discuss the specifics of any part of this endeavor."
CDI's proposal includes the purchase of Fair Grounds and six off-track betting facilities. The potential sale includes several contingencies, including CDI being licensed to operate the track and the installation of slot machines. Slot machines were approved by voters in Orleans Parish in October, but Fair Grounds still must be approved by the state to operate a slots parlor.