Magna Ent. finally replaces Stronach as CEO

Apr 14, 2009 5:05 PM
by Ray Poirier | For months, founder and CEO Frank Stronach of Magna Entertainment Corp. (MECA) said his company was looking for a new CEO so that he could step down. It finally happened but only after the company was required to file for bankruptcy protection.

The company advised the Securities & Exchange Commission that subject to bankruptcy court approval Stronach will be replaced by Greg Rayburn. The SEC filing said that Rayburn will be responsible for the company’s restructuring activities as well as the sale of MECA assets.

Appointment of a new chief executive officer puts an end to Stronach’s dream of controlling the operation of a dozen racetracks in North America and rebuilding some of the nation’s best-known tracks, such as Santa Anita and Gulfstream Park, into entertainment and retail centers.

In acquiring its dozen properties, MECA took on much more debt than its track operations could support. To continue operating, the company was required to sell some of its non-core assets. Attempts to sell some of the tracks in the past couple of years have failed.

Expected to be sold at auction are the facilities formerly owned by the Maryland Jockey Club including Laurel and Pimlico, home of the Preakness Stakes. The latter holding may be retained by state officials who consider it a treasure.

Although Magna Entertainment has indicated that some of its smaller tracks have been put up for sale, no action has been designated for its flagships, Santa Anita in California and Gulfstream in Florida.