Magna, former track owners OK settlement

March 23, 2010|By Andrea K. Walker | Baltimore Sun reporter

Bankrupt Magna Entertainment Corp. has reached a settlement with the former owners of Laurel Park and Pimlico race tracks over their rights to slots profits, just days before the company is scheduled to hold an auction to sell the properties.

Under the agreement, Joseph De Francis and his sister, Karin, would receive $8 million from Magna and $4 million from the Maryland Jockey Club, the umbrella organization of the two tracks, according to court documents. The former owners of the tracks also stand to receive 15 percent to 25 percent of the proceeds of a sale if the tracks bring in more than $39 million.

If Magna's parent company, MI Developments, buys the tracks outside of the auction process, or if the tracks bring in less than $39 million, the De Francis siblings also could receive $1 million.

A hearing is planned on the settlement today. Magna has asked the judge to make a speedy decision so the Thursday auction can occur.

Magna had asked a federal judge to throw out a deal it made with the De Francis siblings and other parties in 2002, when they sold their controlling interest in the Jockey Club, to share potential slots proceeds.

A bankruptcy judge ruled in January that Magna could end the profit-sharing agreement, but the former track owners still had $810 million in other outstanding claims and argued they were entitled to $2.5 million each under employment contracts.

Joseph De Francis declined to comment until after the hearing.

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