06/24/2004 11:00PM

$45M bid for Fair Grounds


Churchill Downs Inc. and Fair Grounds Race Course have signed an asset-purchase agreement whereby Churchill can acquire the New Orleans racetrack for $45 million through an auction in bankruptcy court, according to Douglas Draper, a bankruptcy lawyer for Fair Grounds.

The agreement was finalized Friday afternoon and was part of a bankruptcy court filing that amended Fair Grounds's original Chapter 11 reorganization plan, filed in April.

Churchill Downs Inc. signed on as a stalking-horse bidder, and its offer can still be eclipsed in the bankruptcy court auction, which is tentatively scheduled for Aug. 16. If the Churchill bid is accepted, the purchase must close on or before April 1, 2005, according to the terms of the agreement. Draper said acceptance of a stalking-horse bid varies from case to case.

Fair Grounds declared bankruptcy last spring to protect itself from a lawsuit filed and won by the Louisiana Horsemen's Benevolent and Protective Association. Fair Grounds was judged to owe the horsemen's group more than $89 million for improper deductions taken from video poker machines. The sale proceeds will be used to pay Fair Grounds's creditors, including the horsemen's group.