The battle for privately held Fair Grounds racetrack in New Orleans took another twist on Monday when Churchill Downs Inc. (CHDN) announced it had filed the opening bid in the bankruptcy auction for the track.
In effect, said Churchill, the track’s bid of $45 million placed the company in the position of the so-called "stalking horse." No other bidder has been identified for the bankrupt track other than the owner, the family of president and CEO Bryan Krantz.
The track, recently granted approval for the operation of slot machines, was forced into bankruptcy when a judge ruled the operator owed the horsemen’s purse account some $90 million, monies that had been developed through video lottery machines but not included in the track’s method of accounting for purses.
This was the second bid made by Churchill Downs for the track. After meeting with the Louisiana Horsemen’s Association earlier this year, Churchill offered to acquire the track for $45 million and an agreement with the horsemen as a way of resolving the purse dispute. Track owners rejected the offer.
Krantz meanwhile has asked the bankruptcy court to permit Fair Grounds to file a new Chapter 11 reorganization plan, a move that was opposed by the horsemen’s group.
Churchill Downs Inc. said the acquisition of Fair Grounds would fit nicely into its plan of acquiring quality racetracks.
"Fair grounds offers CDI a winter Thoroughbred racing meet and alternative gaming in a historically strong racing market," said Tom Meeker, president and CEO. "We believe that should Fair Grounds become part of our racing portfolio, the racetrack would benefit from CDI’s industry-leading branding, operational expertise and simulcast distribution network," he said.
In addition to its homebase of Churchill Downs racetrack in Louisville, Ky., the company owns and operates Hollywood Park in California; Calder Race Course in Florida and Arlington International in Illinois, among others.