Legislators aim to help Suffolk OTB

ALBANY -- Two state legislators are trying to get Suffolk Regional Off-Track Betting Corp. out of a legal bind with a new bill that would allow the agency to seek bankruptcy protection.

The move comes seven weeks after a federal court ruled Suffolk OTB improperly went about filing for Chapter 9 bankruptcy in March and that, for now, the betting entity isn't eligible for protection.

The U.S. Bankruptcy Court for the Eastern District of New York said Suffolk OTB inappropriately sought authority from the county legislature, rather than going through the State Legislature and Gov. Andrew M. Cuomo.

Assemb. Robert Sweeney (D-Lindenhurst) and State Sen. John Flanagan (R-East Northport) filed a bill that would give Suffolk OTB state approval.

"Without bankruptcy protection, in the face of fiscal difficulty, Suffolk OTB could be forced to shut its doors and terminate hundreds of employees," the lawmakers said in a memo. "This has devastating consequences for employees, suppliers, landlords, neighborhoods and creditors, and creates complicated and expensive issues for taxpayers."

Churchill Downs, the Kentucky horse racing track and an OTB creditor, filed suit to block the Chapter 9 filing. According to the federal court decision, OTB's bankruptcy plan calls for all creditors to be paid in full. But if the bankruptcy filing is dismissed, it said, "Suffolk OTB may be required to cease operations."

Jeff Casale, Suffolk OTB president, welcomed the legislation. "This doesn't cost the state anything and there is no cost to the taxpayer," he said. "It is simply a procedural step that allows us to address the issues raised in court and continue to restructure and get out of bankruptcy as soon as possible." With Rick Brand