Monday, May 4, 2009

Judge Approves Plan to Sell MEC Properties

Judge Approves Plan to Sell MEC Properties
A Delaware bankruptcy judge on May 4 granted Magna Entertainment Corp.'s request for approval of its plan to sell several horse tracks and other assets.

The plan approved by Judge Mary Walrath includes Santa Anita Park in California, Remington Park in Oklahoma City, Thistledown in Ohio and Portland Meadows in Oregon, as well as MEC's interest in Lone Star Park in Texas.

Ontario-based Magna, the largest horse track owner in the U.S., filed for Chapter 11 bankruptcy protection in March, saying it was unable to obtain new financing while supporting its existing debt.

The sale plan calls for expressions of interest in any of the racetracks to be submitted by May 27, with definitive bids due by July 31. An auction will be held in New York City on Sept. 8, followed by a court hearing in Delaware three days later.

Magna attorney Brian Rosen noted that the company may seek approval later to sell other assets currently not in the mix, including Pimlico Race Course in Baltimore, home of the second jewel of the Triple Crown. Last week, MEC pulled several properties, including Pimlico and its other Maryland assets, Laurel Park and a training center in Bowie, from the list of assets to be sold.

Officials with the state of Maryland and city of Baltimore are fighting to keep Pimlico and the Preakness in Baltimore. Attorneys for the state and city said Monday that they reserve the right to object should MEC decide to put Pimlico up for sale.

Rosen said opposition from Maryland, which he described as "peripheral noise," did not play a role in the decision to withdraw Pimlico from the sale process, and that MEC simply wanted to move forward with selling more valuable assets, including Santa Anita, Remington Park and Lone Star.

"The Preakness is a great day," Rosen said after Monday's hearing. "The problem is that the Preakness funds operations (at Pimlico) for the rest of the year."

Rosen reiterated that MI Developments Inc., a property-management company that is Magna's controlling shareholder as well as its largest secured creditor, will not participate in the bidding, except to prevent the "fire sale" of any asset subject to a low-ball bid.