MAGNA: Desperate hours fast approaching..

[zippyneedsawin]

Magna files for Chapter 11 bankruptcy
By Matt Hegarty

http://drf.com/news/article/102049.html

Magna Entertainment Corp. filed for Chapter 11 bankruptcy in a Delaware court on Thursday and has reached an agreement to sell several of its racetracks, including Gulfstream Park and Golden Gate Fields, to its parent company and largest creditor, MI Developments, the company said.

In a release, Magna said that the filing will not jeopardize any of its ongoing race meets, including those at Gulfstream, Golden Gate Fields, and Santa Anita Park, which on Saturday will host the Santa Anita Handicap, the track's most high-profile race.

Magna will seek "to sell its assets and implement a reorganization of the company" under the bankruptcy filing, the company said. One of its subsidiaries, XpressBet, an account-wagering company, was not included in the Chapter 11 filing, Magna said.

According to Magna, the agreement with its parent company, MI Developments, includes Gulfstream, Golden Gate, Palm Meadows Training Center in Florida, Lone Star Park, AmTote, and XpressBet. MI Developments has agreed to buy the assets for $44 million in cash, the rights to a $15 million lease, and a credit on $136 million in debt Magna owes to MI Developments. However, the agreement can be topped by a third-party offer, Magna said.

Magna said that a bankruptcy advisory firm, Miller Buckfire and Co., will conduct "a marketing and sale process of the company's assets" during the reorganization.

Magna has lost $500 million over the last five years and owes hundreds of millions of dollars to MI Developments and other lending institutions. Approximately $200 million of that debt was scheduled to come due within the next two weeks.