Union Wants Money From NYC OTB

Published: January 20, 2011 01:30 pm EST

New York City Off-Track Betting has been dead for a month, but the union representing its former employees is very much alive. Its lawyers moved yesterday to legally block

the dismissal of NYC OTB’s bankruptcy case, arguing that monies previously paid to tracks -- hundreds of millions of dollars -- should be recaptured to pay health and welfare benefits to some 1,000 terminated employees and 600 retirees.

The OTB lawyer told the bankruptcy judge handling the case, as reported by David Grening in The Daily Racing Form, that the former betting giant is dead and gone, all operations have ceased, all employees have been terminated, and the only money left is enough to pay uncashed employee checks, and that there is no reason not to dismiss its bankruptcy. He said there is no plan to attempt to come out of bankruptcy.

The OTB lawyer, Richard Levin, said, “There is nothing left of New York City OTB except a board of directors and a corporate shell,” and he added -- in what may be one of the oddest revelations of the year -- that he was working pro bono, since there was no money to pay him.

While this was going on, OTB’s union was asking the judge to keep the case open and appoint a trustee “whose sole purpose,” Grening reported, “would be to investigate and prosecute potential claims against New York tracks for hundreds of millions of dollars in unreimbursed payments.”

The union attorney, Richard Mechling, said OTB then could seek monies paid to tracks as far back as 2005 since neither the city nor state had any intention of paying health and welfare benefits estimated at more than $230 million to OTB retirees.

Lawyers for NYRA, Yonkers and Monticello were on hand to oppose the move, arguing that union employees should seek restitution in state court. Mechling told the judge most of the employees and retirees are having a hard time financially, and could not afford to pursue litigation
in state court.

A NYRA lawyer told the bankruptcy judge, Martin Glenn, that it would be unfair to impose the cost of health and welfare benefits on the tracks and creditors, of which NYRA is second only to Yonkers Raceway.

Judge Glenn could rule as early as next week.

(Harness Tracks of America)