An attorney for the Fair Grounds said Louisiana horsemen were on the verge of a settlement Friday night that could spare the New Orleans track from an auction in bankruptcy court later this month over a $90 million video poker judgement.Attorneys for both sides were reviewing the deal, which could be signed Aug. 7. Fair Grounds attorney David Sherman told The Times Picayune that the settlement likely would spare the track facing an auction, which is scheduled for Aug. 16. The proposed settlement is for $25 million, Sherman said. The Krantz family, which owns the controlling interest in Fair Grounds, hopes to make a deal for a partnership prior to the auction date to pay off the horsemen as well as about $12 million owed other creditors, The Times Picayune reported.The negotiations were prompted by a March state district court finding that the Fair Grounds owed horsemen $90 million in video poker revenue that was withheld from purse supplements for more than a decade.Churchill Downs Inc. has announced it plans to open the bidding at $45 million in the event an auction proceeds as planned. "We will have a (partnership) deal within the seven-day period," Sherman told the newspaper. He listed Churchill Downs and horse owner Mike Pegram as possible partners. Among the conditions of the agreement, the Fair Grounds would commit $750,000 to improvements on the backstretch in the next two years, Sherman said, and would also drop all legal action with regard to the March ruling. The case was filed by the Louisiana Horsemen's Benevolent and Protective Association, which represents horse owners and trainers, in 1994 against the Fair Grounds and the state's other three tracks. Evangeline Downs, Delta Downs and Louisiana Downs all settled with horsemen before the March decision. The Fair Grounds, which contended it was following the law in making its purse revenue supplements, filed for Chapter 11 reorganization a year ago. After it was unable to work out a deal with several potential suitors, the track filed a reorganization plan in April seeking a bankruptcy court auction.Once it irons out its ownership difficulties, the Fair Grounds can apply for a license to operate slot machines – approved last year by Orleans Parish voters – from the Louisiana Gaming and Control Board.