Manfusos reject proposal

November 24, 1993|By Ross Peddicord | Ross Peddicord,Staff Writer

The prospect that the ownership of Laurel and Pimlico race courses will be settled in January appears to be diminishing.

The Manfuso brothers yesterday rejected a settlement proposal that Joe De Francis said would have ended all litigation between the two sides, and which is necessary, De Francis said, if the Russian roulette buy/sell provision is to proceed.

De Francis said he now intends to pursue vigorously an appeal on the validity of the Russian roulette clause, which was upheld in August by Judge Ellen Hollander in Baltimore City Circuit Court.

The result: The ownership question could drag on indefinitely in the courts and not be addressed by the Jan. 12 deadline, when De Francis is supposed to state whether he will buy the Manfusos' shares in the two tracks for $8.2 million. If he doesn't buy, then he is contractually bound to sell the Manfusos his shares for the same price.

And if he doesn't make any move by the deadline, the stage could be set for another lawsuit by the Manfusos, which could be followed by a countersuit by De Francis.

Herb Garten, attorney for the Manfusos, said that terming De Francis' letter to the Manfusos last week as a settlement proposal is "a misnomer. It was nothing but a rehash of old issues and the additional threat of continuing litigation.

"We're interested in moving forward according to the terms of the Russian roulette provision, which was verified by Judge Hollander and that they [the DeFrancis group] agreed to," Garten said. "Then we feel everything else will fall into place. We regard what they are doing as delaying tactics."

De Francis called Garten's comments "an out-and-out lie. We are interested in getting this whole matter over with, but it is absolutely essential that a total settlement be made. I don't understand what possible problem they could have with the concept that whoever controls Laurel and Pimlico can devote all of their energies and attention to bettering Maryland racing without any further legal bickering.

"Why should I trust Tom Manfuso? I signed a stockholders agreement with him that said he wouldn't sue me for four years, and 2 1/2 years later, that's exactly what he did. They are acting like Judge Hollander's decision is the final word. The last time I checked theUnited States constitution, it stated the right to appeal."

De Francis' attorney, Jim Gray, said yesterday that the proposal rejected by the Manfusos included provisions that allowed for full and complete legal releases. He said details included "a stipulation that whoever bought the tracks, the other party would help in securing the Virginia license [to build a track near Richmond or Leesburg]. It went so far as to discuss an employment contract that the tracks have with Martin Jacobs [Laurel/Pimlico's chief counsel and executive vice president] and giving John Manfuso [the Manfusos' father] a lifetime box and restaurant privileges."

Speculation in the De Francis camp is that the Manfusos want to keep the threat of open-ended litigation alive in order to scare off potential investors that De Francis might line up to buy out the Manfusos.

"There is so much personal animosity and acrimony between both sides that it doesn't matter who is the buyer or the seller," Gray said. "What we are doing in trying to reach a settlement [of all the litigation] is not a ploy to gain some advantage. But apparently the Manfusos don't want to settle this dispute."

Gray said he will file a response today to the Manfusos' answer to the motion that he filed two weeks ago, asking Hollander to certify her Aug. 6 decision affirming the Russian roulette clause.

If she certifies the decision as a final partial summary judgment, it clears the way for a De Francis appeal. If not, Gray said he could pursue other legal avenues.

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