Karper: Quebec Horsepeople Short-Changed Via Bankruptcy Protection
In an opinion piece released yesterday, Quebec Trotting and Pacing Association (ATAQ) vice president Rick Karper stated that the horsepeople of Quebec are being short-changed under conditions of
Attractions Hippiques' bankruptcy protection. Karper uses the recent Chapter 11 filing of Magna Entertainment Corp. as a contrast to the provincial situation.
Karper's opinion piece appears below in its entirety.
North America's largest owner and operator of horse racetracks, (Gulfstream, Santa Anita, Pimlico, etc.), Magna Entertainment, recently filed for Chapter 11 court protection from bankruptcy in the USA.
“The company’s day-to-day operations will continue uninterrupted throughout the Chapter 11 process while it undertakes to sell its assets and implement a reorganization of the Company. As part of the Chapter 11 filing, the Company has sought emergency relief to ensure the continued payment of employee wages and benefits and horsemen winnings and its ability to honour existing customer programs.”
Coincidentally, Attraction Hippiques, the only operator of horse racetracks in Quebec, has filed for bankruptcy protection under the Companies’ Creditors Arrangement Act (CCAA – C36).
Not unlike Magna’s Chapter 11 filing, Attraction Hippiques day-to-day operations (VLTs, Simulcast Wagering) continues uninterrupted and they continue to pay employee wages and benefits and they continue to honour existing customer programs such as Paritel (internet wagering).
The major difference, however, comes in the fact that Attraction Hippiques does not continue payment of horsemen winnings, whereas Magna does (including the Preakness). As of May 2009, AH is behind by approximately $25 million on payments guaranteed by contractual agreements, with no payments being made in 2009 at all. According to judgments in the Quebec Superior court, Attractions Hippiques doesn’t have to make these payments under their CCAA protection.
Are the horsemen of Quebec being short-changed because the Canadian CCAA is less protective of their interests when compared to US Chapter 11 or has the Superior court judge misinterpreted the law?