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Md. tracks on auction block

Owner of Pimlico and Laurel Park files for Chapter 11

future of preakness uncertain

March 06, 2009|By Hanah Cho | Hanah Cho,hanah.cho@baltsun.com

Magna listed assets of $1.05 billion and liabilities of $959 million in bankruptcy court in Delaware. Some of the largest creditors include the Maryland Thoroughbred Horsemen's Association, the Maryland Racing Commission, the Maryland Horse Breeders Association and the Leffler Agency, the marketing and advertising firm for the Maryland Jockey Club.

Gulfstream Park's president, Bill Murphy, said he told employees yesterday that the track and slots casino there would not be affected.

"Their jobs and benefits will not be affected, and there will be no layoffs," he said.

Gulfstream, one of two Magna racetracks with slots, has struggled to operate profitable gambling operations amid competition from two nearby slots parlors and casinos run by Florida Indian tribes.

Senate President Thomas V. Mike Miller, a supporter of Maryland horse racing, said he would ask the attorney general's office for advice about "any legal way to guarantee that the Preakness stays in Maryland."

The law, which describes itself as "established in recognition of the significance of the Preakness Stakes to the State," also allows Maryland to cancel all racing at Pimlico if the signature race is sold out of state. The statute prohibits the transfer of the Preakness to another Maryland track, except as a result of "disaster or emergency."

Miller said that any further strengthening of laws to preserve the Preakness in Maryland would "pass overwhelmingly" in both chambers of the General Assembly.

Gov. Martin O'Malley is "committed to doing everything that we can to ensure that the Preakness remains in Maryland," said spokesman Rick Abbruzzese. "We'll be talking with legislative leaders ... and finding out how this bankruptcy filing will affect both Pimlico and Laurel."

Baltimore Sun reporters Gadi Dechter and Bill Ordine, Los Angeles Times reporter Roger Vincent, and South Florida Sun-Sentinel reporter Nick Sortal contributed to this article.

WHAT'S NEXT FOR MAGNA?

* Attorneys for Magna Entertainment Corp. are expected to appear this morning in U.S. Bankruptcy Court in Delaware for first-day motions.

* The company is essentially seeking approval to pay its bills and continue operating. Among the most important things it will seek is permission to access a $62.5 million loan to fund day-to-day operations.

* Magna probably will get enough to survive the first 15 days and then it will have to seek final approval for the rest of the money, according to Baltimore bankruptcy attorney Joel I. Sher.

MAGNA'S PLANS

All properties are for sale, including Pimlico Race Course and Laurel Park.

Paying bills: Magna would keep paying employees, horsemen, bettors and vendor bills incurred after yesterday with a $62.5 million, six-month credit line from MI Developments, a Magna affiliate and its controlling shareholder.

Unloading debt: MID would provide $44 million in cash by buying poorly performing or closed tracks, AmTote and other assets. MID would cancel Magna's debt and assume $15 million in lease obligations.

Among the bills Magna owes:

* $3.82 million to Maryland Thoroughbred Horsemen's Association

* $637,487 to the Leffler Agency, a Baltimore advertising and marketing firm

* $269,800 to Maryland Horse Breeders Association

* $193,914 to Maryland Racing Commission

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