Fair Grounds files Chapter 11

Fair Grounds racetrack filed for Chapter 11 bankruptcy on Friday in New Orleans, seeking to protect itself from a legal judgment that could cost the track millions of dollars.

Fair Grounds may owe the Louisiana Horsemen's Benevolent and Protective Association more than $100 million, a figure cited by a New Orleans Times-Picayune story on Saturday. The judgment stems from a 1994 lawsuit the Louisiana HBPA filed against Louisiana racetracks, claiming they were improperly distributing profits from video poker parlors. A district judge initially ruled against the tracks, but an appeals court overturned the decision. In April, the state Supreme Court ruled 7-0 in favor of the horsemen's association.

While other Louisiana tracks reached settlements with the horsemen's group, Fair Grounds pursued a legal resolution. The amount they owe will be determined in an upcoming court ruling. Bryan Krantz, general manager of Fair Grounds and one of its owners, said Fair Grounds and the HBPA had not discussed a settlement in several months, but negotiations are expected to ensue now.

"The lines of communication are open with horsemen," Krantz said.

Krantz stressed that the Chapter 11 filing does not imperil the track's upcoming season, which begins in late November.

"The first thing we're trying to express is that the Fair Grounds is financially sound without the Supreme Court finding," Krantz said Saturday. "We want the employees to feel confident, the vendors to feel confident, and the horsemen to feel confident in our position."

The HBPA has expressed dismay at Fair Grounds' recalcitrance in seeking a settlement. Krantz contends that Fair Grounds simply followed the laws enacted when video poker terminals were introduced to Louisiana racetracks.

In the meantime, Fair Grounds is ramping up its push to bring slot machines to the track. Fair Grounds was approved for slots by the Louisiana Legislature this year, and a parish referendum on slots is scheduled for Oct. 4.

Bringing slots to Fair Grounds would vastly improve the track's financial position with regard to the lawsuit. It would also make the track more attractive to prospective buyers, but Krantz said Fair Grounds isn't for sale.

"We're in the business to stay," he said. "We're not interested sellers."