04/22/2008 11:00PM

Jockeys' Guild offers plan to regain solvency


The Jockeys' Guild has submitted a reorganization plan that would repay riders in full for money deposited with the organization but relies on additional funding from the racing industry for long-term solvency.

The plan, which was filed on Monday in the U.S. Bankruptcy Court for the Western District of Kentucky in Louisville, anticipates that the guild will repay its members for money deposited in individual health savings accounts over a 22-month period. The payments would fulfill the principal of the amount without an allowance for interest.

If the reorganization plan is approved by the guild's creditors' committee and the court, the guild estimates that it would have monthly income of $213,000. Of that total, $118,000 would come from members paying $4 per mount as dues. The rest, $95,000, would come from payments from racetracks as a fee for the use of jockeys' "media rights" during simulcasts, but the sources of those fees have in large part not yet been identified.

The guild filed for bankruptcy late in 2007 after hiring Terry Meyocks, a former racetrack executive, and his consulting firm, Meyocks and O'Hara Racing Enterprise, as its national manager. The guild has struggled with financial problems since 2005, after the board fired a former national manager, L. Wayne Gertmenian, under accusations of mismanagement.

Gertmenian was one of the largest creditors of the guild at the time it filed for bankruptcy, claiming that he was owed $915,000 for a "contract dispute." Under Chapter 11 rules, that allowed Gertmenian to have a position on the guild's creditors' committee, but the guild was successful in having him removed from the committee on Wednesday.

Gertmenian's claim, and lawsuits that the guild and Gertmenian have filed against each other, have been suspended because of the guild's bankruptcy.

The plan filed on Monday stated that the guild intended to seek funding from racetracks for the media rights as a condition of its reorganization. In the early 2000s, the guild received approximately $2.5 million annually from racetracks as a fee for the use of the media rights, but most racetracks stopped paying the guild in 2005 after the organization's relationship with the racing industry soured under Gertmenian's leadership.

Late in 2007, the guild negotiated a contract with Churchill Downs that would require the racetrack company to pay the organization $300,000 a year for the media rights. That contract was amended after the guild filed for bankruptcy so that the payments by Churchill would be restricted to the jockey benefits. In the plan, the guild said it would seek similar arrangements with other tracks.

Meyocks said Wednesday that the guild has sent solicitations to racetracks in the past month asking the tracks to restart payments to the guild under the previous media-rights arrangement. He said the guild has not yet received any firm commitments, but cautioned that many tracks had asked to first review the reorganization plan.

However, the guild has also identified many tracks as being in arrears on the previous payments, an amount that totals approximately $900,000. The plan states that the claims will be turned over to the guild's creditors' committee for collection if the tracks do not come to terms on a new agreement with the organization for media-rights payments.