A legal hitch developed yesterday that is expected to delay until tomorrow the closing of the sale of the Manfuso brothers' stock in Laurel and Pimlico Race Courses to Joe De Francis, Karin Van Dyke and Martin Jacobs.
Settlement was expected to occur in Baltimore this morning, but then it was learned that the Orphans Court of Howard County has not formally approved a distribution of stock in the two tracks from the estate of Frank De Francis to his heirs, Joe De Francis and his sister, Karin Van Dyke.
Representatives of the estate, Joe De Francis and Alec Courtelis, must re-execute various documents guaranteeing the stock transfer before the settlement with the Manfusos can be completed, said Herb Garten, attorney for the Manfusos. The stock from the estate is being given by Joe De Francis and Van Dyke to the Manfusos as security on the deferred part of the purchase price.
At closing, the De Francis group is putting down $1.64 million or 20 percent of the $8.2 million due to the Manfusos for their shares and will pay the balance in installments during the next four years. It is this unpaid balance that is being secured by stock Joe De Francis and his sister inherited from their father's estate.
"We had anticipated that the estate [of Frank De Francis] would have been closed out and the stock distributed by the time of settlement," Garten said. "But that procedure hasn't taken place. So now we have to deal directly with the estate and its representatives."
The necessary documents were sent by overnight mail last night to Joe De Francis, who is attending the convention of the Thoroughbred Racing Associations in New Orleans, and Courtelis, who lives in Florida.
Garten said he expects the documents to be signed and returned in time for the closing tomorrow.
Garten and De Francis' attorneys are meeting today in his office "to go through a dry run and go over everything to make sure sure all of the documents are in order," Garten said. "Then unless there are no new problems, I fully expect closing to take place on Friday."
According to statements made by Joe De Francis, he and his partners obtained the funds to purchase the Manfusos' shares through financing arranged by Jack Kent Cooke, who has purchased land at Laurel Race Course to build a stadium for his Washington Redskins.
De Francis has said that the arrangement with Cooke involves "personal financing" for himself, Van Dyke and Jacobs and "has nothing to do with the corporation [that owns Laurel/Pimlico]." Cooke is not becoming a partner in the track, De Francis added.
According to John McDaniel, chairman of the Maryland Racing Commission, the board is expected to hear details of the Cooke financing from De Francis in executive session at its February meeting, which is scheduled for next Wednesday at Rosecroft Raceway.
De Francis has said he will "be happy" to provide the commissioners with the details in private, but because the financing is a personal arrangement with Cooke, he will not give details in the commission's public session.
McDaniel, however, said he expects some explanation must be given in open session "because people want to know what the deal is and what kind of impact it is going to have on Maryland racing."