01/16/2008 12:00AM

NYRA settles with horsemen


The New York Racing Association and the New York Thoroughbred Horsemen's Association have reached a settlement in a lawsuit filed by the horsemen's group that alleged NYRA was illegally withholding purse funds, according to documents filed with the U.S. Bankruptcy Court for the Southern District of New York.

Under the settlement, the horsemen's group has agreed to drop the suit and NYRA has agreed to adopt practices over the next six years that will reduce a reserve fund known as a purse cushion to $6 million by 2014. The purse cushion, which stood at approximately $20 million at the beginning of 2008, is kept by NYRA out of the horsemen's share of wagering revenues.

Alan Foreman, an attorney for the horsemen's group, said that the agreement will end any litigation by the group against NYRA, and require the association to maintain the cushion at the $6 million level in the future. The agreement needs to be approved by the U.S. Bankruptcy Court, and has been put on the docket for Jan. 23.

"This should get them to pay out more in purses in the future, and reduces their ability to keep the cushion at such an ungodly level," Foreman said.

NYRA's chief executive, Charles Hayward, said Wednesday that the association was glad to put the lawsuit behind it, and said that the reasons for the ballooning balance in the purse cushion was not well understood.

"I think there was a lot of confusion over what the purse cushion was, and this settlement gives us a way in which we can manage it," Hayward said.

The horsemen filed the lawsuit after NYRA filed for bankruptcy late in 2006, alleging that NYRA was violating its statutory responsibilities to distribute the funds in order to keep a reserve of cash.

The National Thoroughbred Racing Association - an industry-funded marketing group that draws some of its revenues from dues from racetracks and horsemen's groups - was a party to the lawsuit, because NYRA pays the horsemen's group's share of dues to the NTRA, also from purse funds. As a result of the settlement, the NTRA has agreed to set NYRA's debt to the marketing group at $279,399, according to the documents.