12/22/2007 1:00AM

Creditors approve NYRA plan

EmailA financial reorganization plan submitted by the New York Racing Association has been approved by 97 percent of its creditors, NYRA officials said on Saturday.

NYRA, which has been operating under protection of bankruptcy court, sent the reorganization plan to its creditors last month after the U.S. Bankruptcy Court for the Southern District of New York approved the proposal. NYRA is scheduled to appear in court on Dec. 27 to argue for final approval of the plan.

Court approval of the plan hinges on political negotiations involving a long-term extension of NYRA's franchise, which expires at the end of the year. Without a politcal agreement to extend the franchise that aligns closely with the terms of the reorganization plan, the bankruptcy court would likely put aside the plan until an agreement can be worked out. If a deal does not mirror the reorganization plan, the plan would likely be scrapped.

The plan is based on a memorandum of understanding approved by Gov. Eliot Spitzer, the state Assembly, and NYRA that would extend NYRA's franchise for 30 years, give the state undisputed title to the three racetracks that NYRA operates, and require the state to provide $75 million to the association to help it emerge from bankruptcy. State officials are currently in negotiations over a deal incorporating those broad terms, but the talks have not produced an agreement.

Opposition to the extension is being led by Republican Sen. Joseph Bruno, the Majority Leader. Bruno has objected to the length of the extension and has been pushing for the creation of a state agency that would control some of NYRA's business operations.