MONTREAL, Nov. 26 /CNW Telbec/ - Attractions Hippiques today indicated to the Quebec government and the Société des loteries du Québec, through a formal notice, that it would be initiating legal proceedings following the Quebec government's most recent unilateral move on October 2, 2009. The government's action compromised the viability of Attractions Hippiques' proposed restructuring plan, leaving it no other option but to cease its pari-mutuel and horseracing operations.
Attractions Hippiques feels the Quebec government did not act reasonably and/or in keeping with the legitimate expectations of the parties at the time the original agreements were renegotiated. Some of the conditions had become impossible to respect because of a lack of political will and the failure of the Ludoplex business model, which was to be the main source of revenue for Attractions Hippiques. Indeed, the government did not respect the legitimate expectations it had created, i.e., that it would act to maximize the Ludoplexes' revenues and would not systematically hinder Attractions Hippiques' efforts to relocate the Hippodrome de Montréal.
It should be borne in mind that under the terms of Attractions Hippiques' restructuring proposal, in accordance with the Companies Creditors' Arrangement Act, the government had to continue returning the tax on pari-mutuel sales and making some changes to the regulations applicable to the zones created for pari-mutuel activities. These two elements were needed to compensate in part for lost revenues arising from the government's decision not to facilitate the construction of a new racetrack north of Montreal. On October 2, despite reasonable assurances that it would support these initiatives, the government issued a news release stating it was withdrawing all forms of revenue from Attractions Hippiques, on the pretext that the company had failed to respect its contractual obligations under the original agreement with the Société nationale du cheval de course (SONACC), thereby forcing Attractions Hippiques to withdraw its restructuring plan.
Attractions Hippiques is currently evaluating the losses it incurred and the profits it was deprived of, and will take the appropriate legal action in the near future.
SOURCE ATTRACTIONS HIPPIQUES
For further information: For further information: Robert Lupien, (514) 845-2257, ext. 233; Source: Attractions Hippiques