Friday, March 20, 2009

MEC Bankruptcy Fallout Hits Ohio Track

MEC Bankruptcy Fallout Hits Ohio Track

The Ohio State Racing Commission ruled March 19 that Thistledown’s racing permit will be suspended as of March 28 if parent company Magna Entertainment Corp., which filed for Chapter 11 bankruptcy protection March 5, fails to renew a $1-million bond.

Thistledown, located near Cleveland, was approved for a 122-day meet that begins April 30. Should the permit be revoked—and that could be avoided depending on the result of ongoing negotiations—the track most likely would face a shutdown of about a week, meaning full-card simulcasts would cease.

William Ford, an attorney with MEC who attended the OSRC meeting, said a hearing will be held April 3 on the MEC bankruptcy. If a judge approves a $60-million funding plan, the Thistledown bond will be paid. Like other MEC properties, Thistledown continues to operate “business as usual,” officials said.

A seven-member creditors’ committee was approved by a Delaware court March 18. The Florida Thoroughbred Breeders’ and Owners’ Association, Jockeys’ Guild, and New York Racing Association have seats on the committee.

MEC already has been approved for $13.4 million in bridge funding, but it didn’t account for the $1-million bond due in Ohio. MEC officials and the OSRC said they will attempt to find a solution to avoid a permit suspension; it’s possible, for instance, the OSRC could mandate a bond that would cover the period from March 28-April 3.

Ford said the bond is accounted for in the $60-million financing plan the court will consider April 3. The attorney said the OSRC action violates the intent of the bankruptcy court, but the commission didn’t agree.

“We’re merely trying to ensure the integrity of gambling in Ohio,” commissioner Tom Zaino said.

The situation prompted a comment from OSRC member Jerry Chabler, who said: “This is a really sad commentary on the state of the industry.”

Thistledown originally applied for 91 racing dates for 2009, but after negotiations with the Ohio Horsemen’s Benevolent and Protective Association, settled on 122, similar to last year’s schedule. The track will race Mondays, Tuesdays, Fridays, and Saturdays, and then add Thursdays July 23. The meet concludes Oct. 31.