03/13/2007 12:00AM

NYRA granted more time


The state of New York has agreed to delay asking a federal judge to throw the New York Racing Association's bankruptcy case out of court, the lead bankruptcy attorney for NYRA said on Tuesday. The state was scheduled to argue its case for the bankruptcy to be dismissed this Friday.

Brian Rosen, the NYRA attorney, said the two sides reached the agreement to give NYRA additional time to resolve issues related to its bankruptcy, which is currently in U.S. Bankruptcy Court for the Southern District of New York.

"I can't see this matter coming up for at least another six to eight weeks," Rosen said.

The state's lead attorney, Nancy Hershey Lord, did not return a phone call on Tuesday, nor did representatives from the office of Gov. Eliot Spitzer.

The state filed a motion to dismiss the case in late December, three weeks after NYRA filed for bankruptcy, arguing that NYRA was ineligible to be a debtor under Chapter 11 bankruptcy because the association owes its existence the state. In addition, the state filed papers with the court March 9 defending its position to dismiss the case after NYRA objected to the state's initial motion.

Several weeks ago, NYRA and the state, through Gov. Spitzer, reached an agreement on a $32 million loan package, to provide funding for NYRA to keep the association afloat through the end of the year. The loan was approved by the bankruptcy court on Feb. 28.

NYRA filed for bankruptcy in the midst of a process to evaluate companies that are seeking to take over the association's franchise to operate Aqueduct, Belmont, Saratoga, and a yet-to-be-built casino at Aqueduct. The franchise expires Dec. 31, and Gov. Spitzer has announced the creation of a state panel that will hear public presentations from bidders over the course of the spring.

NYRA is expected to ask the bankruptcy court on Friday to extend a so-called "exclusive period" until January, Rosen said, though the state and NYRA's creditors' committee are objecting to the length of the extension. Rosen said that the creditors' committee wants the extension to last until Aug. 31, while the state is prepared to grant an extension of 60 days.

The exclusive period allows NYRA to be the only party that can present a reorganization plan to the court.