08/13/2004 11:00PM

Fair Grounds gets extension


The Louisiana Horsemen's Benevolent and Protective Association has extended the deadline for Fair Grounds to arrange financial backing for the $25 million settlement agreement reached last week between the La. HBPA and the embattled racetrack.

The horsemen and the track agreed to the settlement late on the night of Aug. 6, and the Fair Grounds was given until Friday to arrange a partnership or secure loans with which to pay the horsemen and the track's other creditors, who are owed about $12 million. Negotiations proceeded throughout this past week, but had not been resolved as of late Friday, when the extension was granted.

"Monday is the deadline," said Jim Gelpi, lead counsel for the horsemen's group.

Churchill Downs Inc. and horse owner Mike Pegram were known to be actively involved in pursuing a partnership with Fair Grounds's principal owner and general manager, Bryan Krantz. Magna Entertainment Corp. of Frank Stronach also has explored the possibility of acquiring all or part of the track.

With the settlement, Fair Grounds averted a bankruptcy court auction that had been scheduled for Monday. Last week, a bankruptcy court judge in New Orleans confirmed the auction's indefinite postponement. Churchill Downs Inc. was to have been the lead bidder at auction.

Fair Grounds finds itself in this position because of an $89 million legal judgment handed down by a district court judge. The judgment resulted from a long-standing lawsuit filed by the Louisiana HBPA contending that Louisiana racetracks had improperly withheld video poker machine revenues from purse accounts. The state's other racetracks all reached settlements with the horsemen.