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Judge OKs Transfer Of Magna's Racing Assets To MI Developments
Published April 27, 2010
|MI Developments Will Acquire Most Of
Magna's Assets, Including Pimlico, Under Plan
Delaware Bankruptcy Judge Mary Walrath yesterday “approved a plan that will allow Magna Entertainment Corp. to transfer the vast majority of its racing assets to its parent company and largest creditor, MI Developments,” according to Matt Hegarty of DAILY RACING FORM. Walrath approved the plan after “two days of testimony from supporters and opponents of the asset-transfer plan, which was submitted to the court in January.” Under the plan, Magna’s $400M debt to MI Developments “will be wiped out, and Magna will cease to exist.” MI Developments also “will take possession of Santa Anita Park and Golden Gate Fields in California, Gulfstream Park and Palm Meadows Training Center in Florida, Laurel Park and Pimlico Race Course in Maryland, the account-wagering company XpressBet, and the bet-processing company AmTote.” Opponents of the reorganization plan “had argued in court that MI Developments had undervalued the tracks and had failed to make good-faith efforts to sell the properties” so that company Chair Frank Stronach “could retain control.” Magna’s unsecured creditors “will receive at least $89[M] in cash from properties Magna has already agreed to sell.” The creditors, who were owed about $220M, will also receive $1.5M for “expenses related to the lawsuit, which alleged that MI Developments had agreed to loan Magna hundreds of millions of dollars even though it was already aware that the company planned to file for bankruptcy” (DRF.com, 4/26). The THOROUGHBRED TIMES’ Frank Angst noted MI Developments also “will pay more than $100[M] to other creditors, including those with claims against the Maryland Jockey Club.” Magna previously had “reached agreements to sell” Lone Star Park for $47.8M and Remington Park for $80.25M, both to Global Gaming Solutions RP LLC, a subsidiary of the Chickasaw Nation tribe (THOROUGHBREDTIMES.com, 4/26).