Rosecroft Bankruptcy Settlement Approved
May 19, 2011
Rosecroft bankruptcy settlement approved
Posted: 7:33 pm Thu, May 19, 2011
By Rachel Bernstein
Daily Record Business Writer
A settlement was approved Thursday filed by the trustee of Rosecroft Raceway between the bankrupt race track and the Maryland Jockey Club and various horse and racing associations as part of the harness track’s Chapter 11 proceedings.
U.S. District Court Judge Paul Mannes approved the motion by Rosecroft trustee James J. Murphy that would have Rosecroft pay a total of $200,000 to the Maryland Jockey Club, the Maryland Horse Breeders Association Inc. and the Maryland Thoroughbred Horse Association Inc. and dismiss lawsuits filed against the parties in 2009 and 2010.
The Maryland Jockey Club and other racing associations were the largest creditors in the case, with more than $1.7 million owed to them.
Murphy also will assign Rosecroft’s interest in an off-track betting entity to the jockey club and the thoroughbred industry. Rosecroft’s 20 percent share of the entity will be worth more than the claims of the jockey club and the thoroughbred industry, attorneys for the parties said.
Mannes also approved the trustee’s plan of liquidation.
“It was absolutely approved, it was very positive,” said Michael J. Lichtenstein from Potomac-based Shulman, Rogers, Gandal, Pordy & Ecker P.A., the attorney who represented Murphy in the case.
“It was a good outcome. … Everybody’s getting paid in full. Hopefully now they’ll start getting their jobs back,” Lichtenstein said.
The Maryland Jockey Club and Laurel Racing Association LP filed a claim for $1.7 million after Rosecroft’s owners filed for Chapter 11 bankruptcy in June 2009. The Maryland Thoroughbred Horsemen’s Association Inc. filed a claim for $828,159 and the Maryland Horse Breeders Association Inc. filed for $105,722.
Cloverleaf Enterprises Inc., Rosecroft’s former owner, had filed an antitrust suit against the jockey club and the thoroughbred industry in 2009, seeking damages in excess of $10 million, and a suit against Maryland OTB Facilities LLC and New Maryland OTB Facilities LLC in 2010, entities in which the jockey club owns a majority interest, according to the motion.
“I think our clients are pleased to close out this chapter,” said Lawrence D. Coppel of Gordon, Feinblatt, Rothman, Hoffberger & Hollander LLC, who is an attorney for the Maryland Thoroughbred Horsemen’s Association and the Maryland Horse Breeders Association.
Coppel said it was a “remarkable outcome” that his clients will get their money in full with interest. The share of the off-track betting entities was also very valuable and a key issue for the parties to sign the agreement, Coppel said.
“And they can go on. Obviously there’s still issues out there with the industry that weren’t resolved by the bankruptcy that they will need to deal with,” Coppel said.
Alan M. Rifkin of Rifkin, Livingston, Levitan & Silver LLC, who represented the Maryland Jockey Club in the case, also said that the jockey club was pleased with the outcome and that the off-track betting facilities are back under the Maryland Jockey Club’s control.
Cloverleaf also filed a lawsuit in November 2009 against jockey club President Tom Chuckas, a former employee of Rosecroft, asserting breach of contract and “tortious interference.”
The Prince George’s harness track was bought at auction in February for $11 million by Prince George’s Racing Ventures LLC, a subsidiary of Penn National Gaming Inc.
Prince George’s Racing Ventures recently submitted an application to bring back live harness racing and hold 20 days of racing at Rosecroft this year and 54 days next year. The Maryland Racing Commission is still reviewing the application.
Penn National owns 49 percent of the jockey club, Laurel Park and Pimlico Race Course. The company also owns the Hollywood Casino Perryville in Cecil County.