Laurel Park racetrack owner files for bankruptcy
By: Alan Suderman
Examiner Staff Writer
March 6, 2009
The Canadian-based company that owns Laurel Park racetrack filed for bankruptcy Thursday, adding another hurdle to the company’s efforts at putting slot machines at the track.
Magna Entertainment Corp. said it filed for bankruptcy because it needed a “comprehensive financial restructuring.”
“Simply put, MEC has far too much debt and interest expense,” Frank Stronach, Magna’s chairman and chief executive officer, said in a statement, adding that the current recession, global credit crisis and downturn in the U.S. housing market had contributed to the company’s poor financial situation.
Magna has assets of slightly more than $1 billion and owes about $959 million to 10,000 to 25,000 debtors, according to court records.
The bankruptcy filing is more bad news for the company. Last month a Maryland gaming commission rejected Magna’s bid to put 4,750 slot machines at the racetrack after the company failed to submit a $28.5 million fee for its bid. The company has sued the state in an effort to keep its bid alive, saying the state’s bidding process was unconstitutional. A judge is expected to rule on the company’s lawsuit within two weeks.
Bethesda gambling expert Jeffrey Hooke said Magna’s bankruptcy filing wasn’t the “end of the road for putting slots at Laurel.” But he added that it was a “long shot” that the company could meet an April 15 deadline showing that it had the proper financing to build and operate a slot parlor.
Magna said Laurel Park and all its other properties will continue to conduct “business as usual” during its bankruptcy proceedings. The company said it secured $62.5 million from its largest shareholder to funds its operations during bankruptcy proceedings.
“We do not expect there to be any interruption in our ability to serve our customers,” the company said on its Web site.
Magna also owns Pimlico Park in Baltimore, home to the Triple Crown Preakness Stakes race.
The Capital News Service contributed to this report.
