01/06/2007 12:00AM

NYRA's loan request hearing delayed


Though the New York Racing Association will be in U.S. Bankruptcy Court on Tuesday, the major issues regarding debtor-in-possession financing and land ownership have been adjourned until next month.

A hearing on those subjects is now scheduled for Feb. 6 in the court of Judge James M. Peck.

The reason for the adjournment is to give NYRA ample time to respond to objections filed by several parties regarding NYRA's proposed financing agreement with GE Capital Corp. for a $50 million loan. As collateral for the loan, NYRA is putting up the properties of Aqueduct, Belmont, and Saratoga - the three racetracks at which it conducts racing.

Before those objections were filed, NYRA was hoping Judge Peck would rule on Tuesday that NYRA owns the land. The state contends it owns the land and therefore has filed an objection regarding the proposed financing deal. Also objecting to the proposed deal are Excelsior Racing Associates, the group that received a non-binding recommendation from a state ad-hoc committee to be awarded the racing franchise beginning in 2008, and the New York Thoroughbred Horseman's Association. The latter group is objecting to future purse monies - known as the purse cushion - being used as collateral for the loan.

In December, when NYRA applied for approval of its loan agreement with GE Capital Corp, it said it had only enough money to conduct racing through mid-January. But business has been good enough to sustain racing through early February, NYRA officials said.

"We're comfortable we can get into February," said Bill Nader, NYRA senior vice president.

On Tuesday, NYRA will be seeking court approval to retain certain legal and accounting firms for its regular business.

NYRA will also be in bankruptcy court on Jan. 19 when it is expected that Judge Peck will hear the state's motion to dismiss NYRA's bankruptcy case altogether. The state contends that NYRA, as a "public agency" and "instrumentality" of the state is not eligible to declare bankruptcy.