Delaware North Cos. Inc. is being sued by a former partner for allegedly sabotaging efforts to secure gaming rights at Aqueduct Racetrack in New York City.

The lawsuit was filed April 17 on behalf of SL Green Realty Corp. and Aqueduct Development Partners LLC in state Supreme Court in New York City.

The 20-page suit charges Buffalo-based Delaware North Cos. Gaming and Entertainment Inc. of "breach of contract, breach of fiduciary duty and other unlawful conduct" in what the court papers refer to as "DNC's unlawful scheme." SL Green is represented by Kasowitz Benson Torres & Friedman LLC.

SL Green, which initially put up $500,000, and Delaware North, which invested $250,000, were partners in Empire Racing Associates LLC, which sought to gain rights to operate video lottery terminals, or VLTs, at Aqueduct.

The plaintiffs said they spent millions of dollars preparing confidential and proprietary information, which was shared with Delaware North, to obtain approval from New York state for running the business. But SL Green said that in October 2007, Delaware North "actively dissuaded Empire from taking steps necessary to prepare a bid for the VLT rights" so that DNC could launch its own bid for the gaming project.

Delaware North was awarded the rights last fall by the state to place 4,500 VLTs at Aqueduct but backed out of the $370 million offer, citing the changing economic climate. New York state officials have announced that they will accept new proposals for the project, and Delaware North said it intends to re-bid for the gaming rights.

The company also said in a statement that it had not yet been officially served papers regarding the SL Green lawsuit.

"Based on what we have read in the press reports, it appears to be a desperate attempt by SL Green to try to enhance their standing in the re-bid process. We would hope the lawsuit does not complicate or delay the process further. Our sole focus is on the re-bid process and ensuring that we put forward the best possible proposal to the state," said a statement from William Bissett, president of Delaware North Cos. Gaming & Entertainment.

SL Green is seeking compensatory damages from Delaware North.