Hearing postponed in Magna bankruptcy

Apr 4, 2009 1:01 AM
Staff & Wire Reports |

A hearing on selling the assets of horse track owner Magna Entertainment Corp., now under bankruptcy court protection, was delayed to April 20 on Friday so negotiators can ensure the process is more balanced.

The holdings of Ontario-based MEC, the largest horse track owner in the United States, include Golden Gate Fields in northern California, Gulfstream Park in Florida, Lone Star Park in Texas and Baltimore's Pimlico racetrack — host of the Preakness Stakes, the middle jewel of the Triple Crown.

MEC has agreed to the hiring of an independent chief restructuring officer who will manage the sale process.

MEC attorney Brian Rosen also said Magna has agreed to bolster its five-member board with the addition of independent members, although Frank Stronach — chairman of both MEC and its parent company, MI Developments — will remain.

Attorneys for Magna's committee of unsecured creditors had raised concerns about conflicts of interest because of the relationship between MEC and MID, which is among the bidders.

"There's been a great deal of behind-the-scenes activity," said Kenneth Eckstein, an attorney for the creditors' committee.

Eckstein said the committee is working with both MEC and MID to develop a bid process that will be both "credible" and "evenhanded," and will give the company the best opportunity to complete any transaction.

In agreeing to delay the hearing on bid procedures, the judge also granted Magna's request for an additional $2.5 million in financing to continue operations until the April 20 hearing.

Related Articles:
Not much separating Derby elite
Slow start reported in Derby ticket sales
Magna Entertainment collapse may threaten Preakness
Jockey Aaron Gryder riding on high values