Magna reaches bankruptcy deal

Magna Entertainment Corp. has reached a deal with creditors that could allow Frank Stronach's racetrack company to emerge from bankruptcy soon.

Under terms of the agreement, announced Monday by parent company MI Developments, Magna would get to keep Gulfstream Park in Florida and Santa Anita Park and Golden Gate Fields in California, as well as AmTote International and Xpress Bet, an account wagering platform.

The unsecured creditors, who had filed suit in the Delaware bankruptcy over loans allegedly made by Stronach, will get at least $96.5 million.

Creditors will get $75 million in cash, plus $1.5 million to reimburse certain expenses.

The creditors also will get the first $20 million from the sale of Lone Star Park in Texas. MI Developments will get the first $20 million from the sale of Thistledown in Ohio and the first $20 million from the sale of Pimlico Race Course in Maryland, but the creditors will get any proceeds over those amounts from those two sales.

Pimlico, in Baltimore, hosts the Preakness, the second jewel of Thoroughbred racing's Triple Crown. That track and Laurel Park are scheduled to be auctioned Jan. 21. The state of Maryland has asserted a right to block the sale; whoever purchases the track must agree to keep the Preakness at Pimlico.

With the settlement of the adversarial action, Magna and the creditors have agreed to a reorganization plan to be filed next month. The plan must be approved by the bankruptcy judge. The troubled track operator filed for bankruptcy in March.

Ontario-based MI Developments, which is a real estate company, is the majority owner of Magna Entertainment. Racehorse owner and breeder Stronach, who owns Adena Springs in Kentucky, controls MI Developments. He is chairman of both companies.