Another Maryland Track Owner Seeks Bankruptcy Court Protection
Friday, June 5, 2009
In another blow to Maryland horse racing, the parent company of Rosecroft Raceway, the beleaguered track in Fort Washington, has filed for bankruptcy.
Cloverleaf Enterprises filed for Chapter 11 reorganization Wednesday in U.S. Bankruptcy Court in Maryland, company officials said yesterday.
"This is a very sad day for racing in Maryland and a sad day for racing at Rosecroft," said Kelley Rogers, president of Cloverleaf. "It is even sadder for the residents of Prince George's County."
Rogers said the financially troubled company has estimated assets of $10 million to $50 million and debts of $1 million to $10 million. He said the company's largest unsecured creditor is the Maryland Jockey Club of Baltimore.
The 60-year-old Prince George's racetrack, which used to run 88 days of live harness racing a year, with purses averaging $4,000, halted live competition last year. The track, which sits on 130 acres, now features a simulcast-wagering facility.
Over the years, the track received a great deal of attention whenever the Maryland General Assembly debated the possibility of legalizing slot machines. The track's suitors included Baltimore lawyer Peter G. Angelos and Penn National Gaming, a Pennsylvania-based casino operator, which agreed to purchase the track in 2007.
Penn National backed out of the deal last year after state legislation did not make Rosecroft eligible for a slots license.
Cloverleaf Enterprises is the second company that owns a Maryland track to file for bankruptcy court protection this year.
In March, the owner of Pimlico Race Course in Baltimore and Laurel Park filed to reorganize under Chapter 11. Magna Entertainment, a Canadian-based company, also owns the rights to the Preakness Stakes. The Preakness, one of the three annual Triple Crown races, is run at Pimlico.
Worried that the state would lose the storied race, the legislature passed and Gov. Martin O'Malley (D) signed legislation this year that authorizes the state to exercise eminent domain over Pimlico and all rights associated with the Preakness.
Rogers blamed Cloverleaf's bankruptcy filing on a 15-year deal the track made in 2006 with the Maryland Jockey Club, the Maryland Horse Breeders Association and the Maryland Thoroughbred Horsemen's Association. The deal required Rosecroft to pay the three groups $5.6 million a year for the right to simulcast and take bets on thoroughbred racing.
He said the company cannot afford the deal because "the economics don't work." He said the racetrack would have to hand over nearly half its annual profit to the thoroughbred industry.
Rogers said he plans to make a major announcement next week regarding the deal.
"We're hopeful that we can emerge from bankruptcy," Rogers said. "For us, this is a David vs. Goliath situation, and we want to emerge from Goliath's shadow."