- Sorry for more lousy picks at Aqueduct yesterday, and I'm done picking ponies for the rest of this year. My aides are currently in negotiations with Spitzer, Bruno, and Silver as to whether I continue any handicapping at all in 2008. Matt Hegarty reports in the Form that the three will meet today to discuss the franchise, but I'm not clear as to whether that refers to their staffs, or if the three of them will actually be together in the same room. Introductions may be in order if the latter is the case. Negotiations on a temporary extension are said to be "ongoing."
With no legislation on the MOU planned, NYRA's bankruptcy hearing has been postponed to January. Since the reorganization plan is based on the MOU being passed into law, there seems little point in proceeding at this time.
"We've been having very positive discussions with the folks in Albany to try and help break the logjam that may exist . . ." NYRA's bankruptcy attorney, Brian Rosen, said yesterday. "We didn't want to in any way impose ourselves [on today's meeting] by going forward in the bankruptcy court. [NY Post]The motion by unsecured creditors - the IRS and the Pension Benefit Guaranty Corp. (PBGC) - for the court to reject the reorganization is based on their stated belief that the MOU will never be passed in a form that will allow the plan to move forward. NYRA's creditors shouldn't be "forced to live with a confirmed plan that can never be implemented," the filing said. The PBGC's motion includes a request to end the plans, which, it says, are 66% funded. This is actually an effort to protect the pensioners.
According to PBGC estimates, the plans have $137.3 million in assets to cover about $208.8 million in benefit promises. If the PBGC becomes statutory trustee of the plans, it expects to be responsible for $59.7 million of the $71.5 million shortfall. [PBGC Press Release] [Forbes Magazine]However, the company notes that its actions are based on "the likelihood that [NYRA's] racing franchise will not be renewed by the end of the year." Though that may literally be the case, it's more likely that some kind of agreement will be in place by Dec 31, for a temporary, if not permanent extension. I think. [And I should add here that the reorganization plan calls for the pensions to be 100% funded.]
Another creditor, Plainfield Special Situations Master Fund Ltd, is also dissing the plan, but keep in mind that the investment firm is a partner of Capital Play Ltd. It purchased $500,000 worth of NYRA debt in order to get their two cents in, and it's quite likely that it was among the 3% which voted against the reorganization plan.