Associated Press

The president of Racing Services Inc., the bankrupt Fargo company that took illegal wagers on horse races, cannot collect $110,218 in rent before other company debts are paid, a federal appeals court says.

Susan Bala contended that Racing Services was obliged to pay the 11 months' rent as an administrative expense during the company's bankruptcy liquidation. The trustee who controlled its assets refused to pay.

Bala was Racing Services' owner and sole shareholder, and the company leased space in a Fargo office building she owned. Bala sold the building in December 2004, court records say.

William Hill, a federal bankruptcy judge in Fargo, ruled the rent claim was proper, but said it could be paid only after other debts were satisfied, including the state of North Dakota's claim for $6 million in unpaid taxes and a $99 million federal forfeiture judgment.

Both Bala and RSI were convicted in federal court in July 2005 of 12 felonies, including illegal gambling and money laundering, for running an unlicensed gambling operation.