Judge Delays Hearing On Sale Of Racetracks

April 21, 2009|By From Sun staff and news services

Monday's hearing on the sale of Laurel Park, Pimlico Race Course and other racetracks owned by Magna Entertainment Corp. was delayed a second time, to May 4.

A U.S. bankruptcy judge granted final approval Monday for $38.4 million in financing to continue operations. The amount was reduced from the $62.5 million initially proposed, and the maturity extended 60 days until Nov. 6, allowing a longer marketing period for potential sale of Magna's assets.

Magna, which filed for Chapter 11 bankruptcy protection in March, is asking the judge for permission to auction Maryland's thoroughbred tracks and other properties, including Santa Anita Park in Southern California.

At least four potential bidders have emerged in recent weeks for Laurel and Pimlico, including Baltimore developer David Cordish.

Maryland has asked the court to affirm its claim to the Preakness Stakes, the second leg of horse racing's Triple Crown, which is run in Baltimore each May. Maryland law gives the state the right to match any accepted bid to buy the event, but bankruptcy courts can disregard state laws if they feel they are not in creditors' interests.

Last week, Gov. Martin O'Malley signed legislation giving the state eminent domain rights over the Preakness Stakes, the largest sporting event in Maryland.

Meanwhile, MI Developments, the controlling shareholder of Magna, said Monday that it will terminate a bid agreement with Magna to buy a handful of assets, including Gulfstream Park in Florida and Lone Star Park in Texas. The bid was valued at $195 million.

Several Magna creditors have objected to MID's bid, arguing conflict-of-interest concerns.

MID is Magna's largest secured creditor, and both companies are controlled by founder Frank Stronach. MID said it will continue to evaluate whether to bid on Magna's assets during the sales process.

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