NEWS
MI Developments mulls bidding on key tracks
Posted: Wednesday, November 11, 2009 3:18 PM
by Frank Angst
MI Developments Inc., the parent company of bankrupt racetrack owner Magna Entertainment Corp., faces a December 4 deadline to submit a stalking horse bid on Maryland Jockey Club operations.
According to MI Developments’ third quarter earnings report, the Canadian-based real estate company is considering stalking-horse bids on Maryland Jockey Club, which includes Laurel Park and Pimlico Race Course, as well as on Golden Gate Fields, Gulfstream Park, and Santa Anita Park.
MI Developments is the parent company of Magna Entertainment; Frank Stronach is the founder and chairman of both companies.
When Magna filed Chapter 11 in March, MI Developments submitted a stalking horse bid on several key racetracks and properties but terminated the bid on April 20 after a number of objections in part to expedite the Chapter 11 process. However, the company could return to the bidding process if there are no other stalking horse bids that reach an acceptable value.
“[MI Developments] is continuing to evaluate all of its alternatives, which may include entering into a stalking horse purchase agreement for one or more of such assets in the event that the debtors do not receive any other stalking horse bids acceptable to the debtors,” MI Developments said in its quarterly report.
Current deadlines for stalking horse bids are December 4 for the Maryland Jockey Club properties and February 10, 2010, for Golden Gate, Gulfstream, and Santa Anita.
Other important dates are approaching in the Magna bankruptcy case.
A key trial is scheduled to begin on January 11 when the Official Committee of Unsecured Creditors will contend that payments by MI Developments to Magna Entertainment Corp., which MI Developments calls guaranteed loans, actually are equity. MI Developments contends that its guaranteed loans should receive priority from the court in terms of repayment as Magna properties are sold for equity. The unsecured creditors oppose this position.
MI Developments did not speculate which way the court would rule.
“Furthermore, although, as a general matter, secured creditors are entitled to priority over unsecured creditors to the extent of the value of the collateral securing such claims, no assurance can be given as to the treatment the MID lender’s claims will receive in the debtors’ Chapter 11 proceedings,” MI Developments said in its quarterly earnings report.
Magna plans to conduct a November 17 auction for land it owns in Dixon, California.
Frank Angst is a Thoroughbred Times senior staff writer
