The club that owns Punchestown racecourse is moving to resolve disputes with the State and the billionaire Getty family after members failed to support a plan to raise cash to clear its €10 million liability to both bodies and the banks.
The Kildare Hunt Club yesterday said it expected to open talks with Horse Racing Ireland in order to agree a new joint venture with the State body, which has been managing the course for the last four years.
The club issued the statement after failing to get sufficient support from members at a meeting on Thursday night for a planned land sale to fund the repayment of an estimated €4 million owed to the Gettys and to clear liabilities it owes to the State and the banks.
Six special resolutions were proposed at the meeting but they did not get the required two-thirds majority. As a result, the club is moving to resolve its differences with Horse Racing Ireland, the State body that administers horseracing in Ireland.
The Gettys are suing the club, through their company, GT Equinus, for repayment of the principle and interest due on €3.8 million that they loaned to the course in 1998 under the passports-for-investment scheme.
The debt could have been settled for €2.15 million last March under a deal negotiated between the racing authority and the Gettys. However, a dispute over leases held by the State body and the banks as security for the club's other liabilities halted this.
Some club members argue that the terms of the leases are invalid and that they run the risk of handing over ownership of Punchestown's 189-hectare (466-acre) landbank to the State body. It has always argued that they are a standard security for financial liabilities. Its chief executive Brian Kavanagh told Thursday's meeting that this was not its intention.
Recently the agency told club officers that it could provide Punchestown with the funding it needed to trade out of its debts, and that it was willing to look again at the terms of the leases.
Horse Racing Ireland has been managing the course since 2002. It moved in when the business was losing €500,000 a year and was in danger of going under. It is now on target to make a profit of €600,000 in 2006.
When Horse Racing Ireland moved in four years ago, it agreed the terms of a joint venture with the club. It is also took four seats on the board of the track's operating company, Blackhall Racing, and holds a veto over whom the Kildare Hunt Club appoints as chairman.
However, the dispute over the leases meant that members never formally approved the joint venture. Under the terms of the plan put to them on Thursday, once the debts had been cleared, the club would have moved to reduce Horse Racing Ireland's representation on the board, although chairman Matt Dempsey said it wanted it to continue to manage the racing business.
The State authority would have opposed this move. Mr Kavanagh told The Irish Times last week that there was considerable State investment in Punchestown and it was the body best employed to safeguard this.
He said the management team, headed by former Kerry Group executive Dick O'Sullivan, had returned the racecourse to profitability.
In his statement yesterday, Mr Dempsey said that Horse Racing Ireland had made "a wonderful contribution" to the management of Punchestown.
"We want to see that partnership maintained, but on terms that are fair to the club, which has owned Punchestown for more than 100 years," he said.
Mr Dempsey also signalled that he believed it would be possible to settle the debt owed to the Gettys without going to court.
