De Francis keeps control of tracks

January 21, 1994|By Jon Morgan and Ross Peddicord | Jon Morgan and Ross Peddicord,Staff Writers Staff writer Sandy Banisky contributed to this article.

Joseph De Francis, the corporate lawyer-turned-racetrack magnate, yesterday gained help from Redskins owner Jack Kent Cooke to settle a long-running boardroom feud and consolidate his ownership of the Pimlico and Laurel racetracks.

Details were not released, but the intervention of Mr. Cooke will allow Mr. De Francis to buy out track co-owners Bob and Tom Manfuso under the terms of a 4-year-old stockholders agreement.

The agreement allowed one side of the estranged partnership to buy out the other and control Maryland's premier thoroughbred tracks.

"I have the money, and I'm buying them out," Mr. De Francis said last night.

Mr. De Francis, who came within hours of selling the tracks to out-of-state interests, said he would send the notification to the Manfusos today, the deadline for the transaction.

Mr. De Francis would not comment on Mr. Cooke's role in the matter, but in a written statement said: "I'm absolutely thrilled about this association with Jack Kent Cooke. . . . His experience and wisdom will be invaluable to Laurel and Pimlico."

PD Mr. Cooke "is not going to be a partner," said Tim Capps, a race

track spokesman. "There won't be any ownership interest."

Mr. De Francis and his partners, Martin Jacobs, Laurel/Pimlico's general counsel and executive vice president, and De Francis' sister, Karin Van Dyke, signed an agreement with Stuart Haney, an attorney for Mr. Cooke, at about 4:30 p.m. yesterday.

The buyout agreement provided for $8.2 million to be paid in cash or over time, as long as an entity other than the racetracks guaranteed payment. Mr. Cooke could have provided such a guarantee.

Reached at his home yesterday, Mr. Cooke said he had invested "not a penny" in the race course. But he said that he "helped Mr. De Francis to find ways of obtaining the additional money he needed." How? "Through wisdom and genius." Asked if he had arranged other investors to help Mr. De Francis, Mr. Cooke said, "I'm not answering any more questions."

The Redskins owner has spent months dealing with Mr. De Francis, 39,who was enthusiastic about selling property to Mr. Cooke, 81, for construction of a new football stadium in Laurel. Mr. Cooke likely would not have wanted to begin negotiations anew with someone perhaps not so eager to support football -- who might not even have wanted to sell the property to him.

Also announced yesterday was a purchase by Mr. Cooke of 100 acres of land at Laurel for the stadium project. Mr. Cooke VTC formerly had said he was buying 55 acres. It is unclear if the proceeds of the additional land purchase could be used by Mr. De Francis to buy out the Manfusos, because the land was technically owned by Laurel Race Course, not by him.

But the money could be used to pay down the $40 million debt hanging over the tracks.

Mr. Cooke apparently entered the picture last Friday, after it was reported that Hollywood Park was buying a controlling interest in Laurel and Pimlico. Sources said that Mr. Cooke was concerned about the impact of the deal on his stadium project and that he is also a friend of Marje Everett, the former operator of Hollywood Park who was ousted by current majority owner R. D. Hubbard in 1991 after a bitter proxy battle.

The agreement allowing Mr. De Francis to retain ownership came only hours before he was scheduled to sell controlling interest in the tracks to Hollywood Park, an event that apparently would put Pimlico into out-of-state hands for the first time in its history.

The venerable Pimlico, in northwest Baltimore, is home to the Preakness Stakes. Laurel Race Course is located midway between Baltimore and Washington.

Representatives of Mr. Hubbard were in Baltimore prepared to complete the deal yesterday when Mr. De Francis notified them he was not selling. A Hollywood Park spokesman declined to comment last night.

Collapse of that deal disappointed Wall Street, which has been smitten by Mr. Hubbard's vision for vast gambling complexes built around racetracks. Hollywood Park stock, which had gained $3 in recent weeks on rumor of the Maryland deal, closed at $28.875, off $1.125 from the day before.

"The word was out that he had it," one stock trader said of the presumed deal for Pimlico and Laurel.

Under the agreement, Mr. De Francis will make his first $1.6 million payment to the Manfusos on Feb. 7. The balance will be paid over a four-year period.

Bob Manfuso said he had not been officially notified of the decision by last night, but said he was glad if it meant the conflict was over.

"It's time to terminate the thing. We really don't have a reasonable relationship with De Francis and his group, and it's time to end it," Mr. Manfuso said.

"I don't think De Francis' record of operating a racetrack in Maryland holds water. It is not a good record," Mr. Manfuso said.

Reaction to Mr. De Francis' victory was mixed in the racing

industry, where his tenure has been controversial. He has

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