The bankrupt owner of Laurel Park and Pimlico Race Course wants to terminate a profit-sharing agreement to split any potential slots proceeds with the tracks' former owners, including Joseph De Francis, before the two racetracks go on the auction block early next year.
Although the tracks' owner, Magna Entertainment Corp., was disqualified in its bid to bring slot machine gambling to Laurel Park, the state license to operate a casino in Anne Arundel County could be up for grabs. The only recognized bidder, the Baltimore-based Cordish Cos., has run into problems obtaining zoning approval for a proposed 4,750-machine slots facility near Arundel Mills mall.
Members of the Maryland commission that approves slots licenses indicated recently that they might be forced to reject the Cordish bid if the Anne Arundel County Council does not act to resolve the zoning matter. The commissioners set a Dec. 17 deadline for a solution of the issue.
Meanwhile, Pimlico is not a designated site for slots in Baltimore.
In a motion filed last week, Magna asked a federal bankruptcy judge to reject the deal that it negotiated with De Francis and other former owners in 2002 when they sold their controlling interest in the Maryland Jockey Club, the umbrella organization for the two tracks.
Magna, a Canadian firm that filed for Chapter 11 bankruptcy protection in March, received court approval earlier this month to sell the Maryland tracks and the Preakness Stakes at auction Jan. 8.
De Francis said in a brief interview late Wednesday that he and other former owners "intend to oppose the filing vigorously."
"We think it's dead wrong, and there isn't too much to say besides that," said De Francis, whose father, Frank J. De Francis, and partners purchased Laurel Park in 1984 and Pimlico two years later.
Joseph and his sister, Karin, inherited the tracks when their father died in 1989 and sold their remaining interest to Magna in 2007.
Magna's attorney argued in court papers that the slots profit-sharing deal could hinder the sale of Laurel Park.
Even though Laurel Park's bid for a slots license was tossed out because Magna failed to submit the required licensing fee, its lawyers said a future owner of the Maryland tracks could apply for a slots license. That opportunity to reap projected slots revenues could significantly increase the amount a prospective buyer might be willing to bid, while the existence of the profit-sharing agreement could lower potential bids.
