Sunday, March 15, 2009

'Critical' MEC Financing OK'd by Judge


A judge signed an interim order March 13 allowing Magna Entertainment Corp. to borrow $13.4 million to continue its operations during the early stages of the company's bankruptcy reorganization, though final approval for the lending facility won’t be authorized until an April 3 hearing.

U.S. Bankruptcy Judge Mary F. Walrath, who is presiding over MEC’s Chapter 11 proceedings in a Delaware federal court, said in her ruling that “good cause” had been shown for entry of the order.

“An immediate and critical need exists for the debtors to borrow funds and or obtain other financial accommodations,” she wrote, referencing proposed debtor-in-possession financing extended by a subsidiary of MEC’s parent company, MI Developments. “The debtors do not have sufficient available sources of working capital or financing to carry on operation of their businesses without the use of cash collateral and access to financing to the DIP credit facility.”