NYRA Steps Toward Chapter 11 End
Updated: Thursday, November 29, 2007 12:08 PM
Posted: Wednesday, November 28, 2007 1:07 PM
Photo: Barbara D. Livingston
NYRA president Charles Hayward
The New York Racing Association has submitted 62 pages of financial plans it anticipates a bankruptcy court will use Nov. 28 to begin the process of ending its year-long Chapter 11 protection.
“Our hope is that this is a concrete first step in moving this process along,’’ NYRA president Charles Hayward said of the court filing that outlines the racing entity’s plan for emerging from bankruptcy protection.
At the heart of the plan is the recent recommendation by Gov. Eliot Spitzer to give NYRA a 30-year franchise extension to run Aqueduct, Belmont, and Saratoga. In return, NYRA gives up its land claims for the three tracks, valued in excess of $1 billion. The state also would provide NYRA with $75 million and give up $132 million in past claims against NYRA.
The deal still needs legislative approval.
Hayward, though, said critics should not call the plan offered by Spitzer a bailout. “At the end of the day if there is no new NYRA franchise, the state has a responsibility to assume all the liabilities of NYRA, which is substantially more money than we are talking about in our reorganization plan,’’ he said.
NYRA puts potential liability for the state at more than $300 million.
The “disclosure statement’’ filed by NYRA Nov. 27 is intended as a roadmap for the creditors committee and the state to use in what NYRA officials hope will be the end of its bankruptcy case.
The filing says creditors will be paid 100 cents on the dollar for their claims and that contributions to its employee pension plans will be satisfied.. It is also offering to pay the IRS up to $25 million for back taxes, far below the $1.6 billion the IRS says it is owed by NYRA in taxes and penalties. NYRA also will retain 17.5 acres of land adjacent to Aqueduct; it then hopes to sell that parcel sometime next year for about $15 million.
The bankruptcy filing assumes NYRA gets another franchise, which is still up in the air as Spitzer and lawmakers have yet to resolve the matter. The current NYRA franchise expires Dec. 31, and NYRA again in court papers Nov. 27 said there is no guarantee it will continue racing after that date.
NYRA also argues in the court papers against an alternative bankruptcy option: liquidation, in which NYRA is done away with and its assets are sold.
“Our hope is that the creditors committee and that the state will vote to approve the plan subject to the approval of the terms of the memorandum of understanding (with Spitzer),’’ Hayward said.
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