Pimlico, Laurel

Mar 30, 2010 1:25 AM

In his quest to dominate the thoroughbred racing industry, through his company, Magna Entertainment Corp. (MECA), Frank Stronach acquired a majority interest in the Maryland Jockey Club with the right to operate Pimlico, home of The Preakness Stakes, and Laurel Race Course.

Unfortunately, Magna Entertainment went bust and the two tracks were ordered sold to help repay the company’s multi-millions of dollars in debt.

Despite the appeal of owning The Preakness, second leg of thoroughbred racing’s Triple Crown, no buyers were found, according to Magna and its committee of unsecured creditors.

So, Stronach turned to MI Developments (MID), a Canadian company whose principal stockholder and CEO also is Frank Stronach. MID agreed to pay some $110 million to various creditors, including former owners Joe and Karin De Francis, to acquire the two properties.

The deal will also settle a De Francis claim that the former owners had the rights to any slot machine revenues should the state decide the tracks could become racinos.

A De Francis lawyer said his clients were disappointed there would be no auction for the tracks, since they expected to be among the bidders, but they would go along with the sale and settle the dispute over the slot machine rights.

The De Francis siblings inherited the tracks from their father, the late Frank De Francis, who revitalized Maryland horse racing after acquiring the tracks from John Shapiro.

Magna Entertainment already has arranged with the court to retain Santa Anita racetrack in California and Gulfstream Park in Florida when the company exits bankruptcy.