03/06/2009 12:00AM

Bankruptcy doesn't ensure a sad ending

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ARCADIA, Calif. - A list published in Mental Floss, an online magazine, offered a collection of famous people who had gone through some kind of bankruptcy or complete business failure. They included Henry Ford, Walt Disney, Burt Reynolds, and Abraham Lincoln.

This probably won't make Frank Stronach feel any better, now that it's official his Magna Entertainment can no longer survive in its current form under the mountain of debt it accumulated over the past 10 years. But at least it's good to know there is life after Chapter 11, including an Oscar nomination for "Boogie Nights." That was Reynolds, not Lincoln.

It is also a matter of record that some very high-profile racing entities have undergone bankruptcy reorganization, and they now welcome MEC to the club. The New York Racing Association emerged from Chapter 11 last September, with a helping hand from the state of New York, and in December 2008 a reorganization plan for the Jockeys' Guild was approved by a bankruptcy judge, allowing that group to go forward in its representation of the game's human athletes.

In terms of scope and complexity, the three are very different, as were the reasons they ended up in bankruptcy proceedings. The Guild crumbled beneath the weight of a management scandal that included accusations of embezzlement. NYRA was a political punching bag that was finally pushed into a financial corner by a combination of operational blunders and its own hubris. Magna Entertainment, driven solely by Stronach's vision of dominating the sport, borrowed too much money and bought too much stuff without ever earning enough to pay it back.

Magna, of course, is by far the largest racing interest to go Chapter 11, and its tentacles are long. It should be no surprise that both NYRA and the Jockeys' Guild have vested interests, including back payments of simulcast revenues owed by Magna tracks taking NYRA signals.

"In the filing they said we were owed about $1.1 million - I think we're actually owed about $1.8 million," said Charles Hayward, president of NYRA. "I think that puts us up fairly high on the list."

Hayward knows exactly what management at Magna tracks will be going through, as the bankruptcy process unfolds, including a brutal Catch-22 in terms of dealing with the vendors who supply everything from copy machines to tractor equipment.

"We had to do leases, because we didn't have the cash to make outright purchases, and you're required to be prompt on all payments going forward," Hayward said. "But there are a lot of companies that will say 'No, you're a bankrupt company. We're not going to do business with you.' In our case, though, I'd say 90 percent of our vendors stuck with us.

"If our experience holds true," Hayward added, "people will want to see those tracks to keep racing, the company stay in business, and recoup whatever monies are in the pre-positioned debt."

The Jockeys' Guild was hanging on an even thinner thread than either MEC or NYRA when it entered Chapter 11.

"If it wasn't for Magna and Churchill Downs, the Jockeys' Guild would not have survived," said Terry Meyocks, executive director of the Guild. "Right now the Magna tracks are pretty current with what they owe us. We have an agreement in place. We realize the agreement doesn't necessarily have to hold up once a company is in bankruptcy. But hopefully, as their tracks continue on with racing, those agreements can be a part of it."

At this point, Meyocks noted, the Jockeys' Guild is not among the MEC creditors waiting in line.

"Not as yet," Meyocks added. "But if we ever are, it will be as an ally and supporter, because they've been great for the riders. I hope we can be there to help them."

Velazquez good choice for Woolf Award

John Velazquez, chairman of the Jockeys' Guild board of directors, will spend an extra day in California this weekend to accept the 2009 George Woolf Memorial Jockey Award at Santa Anita on Sunday afternoon.

Through the years, the Woolf Award winners have been chosen by the local media, then at one point by a vote of fans. Nowadays the process is a joint venture between Santa Anita and the Jockeys' Guild, and it is the jockeys who vote for the Woolf Award candidates. Basically, they voted for the boss.

In this case, though, there can be no quarrel. Velazquez, 37, embodies every quality that the Woolf Award founders had in mind when the honor was created in 1950, four years after Woolf's death in a race at Santa Anita.

Beyond his towering stats, his two Eclipse Awards, and his regular presence atop some of the best horses in the land - including the hot Kentucky Derby property Quality Road - Velazquez has earned widespread respect among both his peers and the broader racing community. His serene demeanor and killer smile belie a passionate commitment to the welfare of his fellow jockeys. Ask any past president or chairman of the Jockeys' Guild - even in the best of times, it is not easy being the front man for an organization rife with wildly diverse personalities and a hornet's nest of life and death issues. As the Guild continues its rehabilitation, Velazquez has proven to be the right man at a difficult time. The Woolf Award provides his fellow riders a grand way to show their gratitude.