Roussel makes Fair Grounds bid

NEW ORLEANS - Louie Roussel III, a former owner of the Fair Grounds, confirmed Wednesday that he had made a formal offer to buy the financially troubled racetrack. Roussel, reached by telephone in Florida, said he had made a $30 million offer.

Last week, a bid of $28.5 million from Churchill Downs Inc. - unconfirmed by CDI officials - was made public. Roussel, who sold Fair Grounds to the Krantz family in 1990, said 70 percent of his bid would be used to pay a Louisiana horsemen's group that Fair Grounds might owe millions of dollars.

"Right now I'm the high bidder," Roussel said.

But the timetable for the Fair Grounds changing hands - if indeed the Krantz family gives up control of the racetrack - could be far-reaching, and other undisclosed bids could exist. Moreover, if all or part of Fair Grounds is sold, strict monetary value is only one among several factors considered in assessing a bid's viability, according to Douglas Draper, an attorney closely involved with the Fair Grounds bankruptcy case. Draper said Wednesday that "six to eight" parties were negotiating to acquire all or part of Fair Grounds.

Fair Grounds declared bankruptcy last spring after the state's Supreme Court ruled 7-0 against the track in a lawsuit filed by the Louisiana Horsemen's Benevolent and Protective Association contending Fair Grounds improperly disbursed profits generated by video poker machines. A state district court judge postponed issuing a judgment amount at a hearing March 1, but a ruling on damages that could go as high as $90 million could be issued March 23.

Fair Grounds must submit a reorganization plan in bankruptcy court by March 29. The publicized bids for the track, and rampant rumors of interested parties and pending agreements, are part of the combustible run-up to that act.

Draper said he was "sort of surprised that things have become as public as they are. Usually, one bidder doesn't want another one to know what they're doing."

The pending financial judgment against Fair Grounds complicates the bidding process by introducing an essential third party, the horsemen's group.

Draper said it was possible that an interested party could purchase the horsemen's claim. Such a move could preclude another possible scenario, wherein Fair Grounds was auctioned off in bankruptcy court. If an auction does come about, it could take different forms. One is the introduction of a so-called "stalking horse," an entity whose bid is judged to represent the best overall outcome for Fair Grounds's creditors. In court, another bidder can arise to challenge the stalking horse.

Another possibility is a blind auction, where interested parties submit their bids, which are then judged for suitability by the court.

Emblematic of the convoluted fluidity of the Fair Grounds current situation was still another scenario offered by Draper.

"The [district] court could still say the horsemen aren't owned anything," Draper said.