MAGNA: Desperate hours fast approaching..

[-BT-]

KABOOM!!

PRESS RELEASE: Magna Entertainment Corp. announces filing for Page 1/8
Chapter 11 bankruptcy protection


AURORA, ON, March 5 /PRNewswire-FirstCall/ - Magna Entertainment Corp. ("MEC"
or "the Company") (NASDAQ: MECA; TSX: MEC.A), together with certain of its
wholly-owned subsidiaries, today announced that it has filed voluntary
petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware (the "Court")
and will seek recognition of the Chapter 11 proceedings from the Ontario
Superior Court of Justice under section 18.6 of the Companies' Creditors
Arrangement Act in Canada.

MEC's day-to-day operations will continue uninterrupted throughout the
Chapter 11 process while it undertakes to sell its assets and implement a
reorganization of the Company. As part of the Chapter 11 filing, the Company
has sought emergency relief to ensure the continued payment of employee wages
and benefits and horsemen winnings and its ability to honor existing customer
programs. XpressBet(R), MEC's account wagering company, is not one of the MEC
subsidiaries making a Chapter 11 filing.

In connection with the Chapter 11 filing, MEC announced that it has arranged a six-month secured debtor-in-possession financing facility (the "DIP
Financing") in the amount of $62.5 million from a subsidiary of MI Developments
Inc. ("MID"), the Company's largest secured creditor and controlling
shareholder. The Company will use the proceeds from the DIP Financing to fund
its operations during the Chapter 11 proceedings. If approved by the Court, the
DIP Financing will enable MEC to continue to satisfy its obligations associated
with the ongoing operation of its business, including the ordinary course
payment of employee wages and benefits and horsemen and customer winnings, and
payment of post-petition obligations to vendors. The DIP Financing will be
secured by liens on substantially all assets of MEC, as well as a pledge of
capital stock of certain guarantors. Advances under the DIP Financing must be
made in accordance with an approved budget. The terms of the DIP Financing
contemplate that MEC will sell its assets through an auction process and use
the proceeds from the asset sales to repay its creditors. Miller Buckfire &
Co., LLC, the Company's financial advisor and investment banker, will conduct a
marketing and sale process for the Company's assets.

The terms of the DIP Financing were considered by the Special Committee of
MEC's board of directors and the Special Committee retained independent legal
and financial advisors to assist in its deliberations. The DIP Financing was
approved by MEC's board, following a favourable recommendation of the Special Committee.

MEC also announced that it has entered into an agreement with MID to sell its
interests associated with the following assets (the "Stalking Horse Bid"):
Golden Gate Fields; Gulfstream Park, including MEC's interest in The Village at
Gulfstream Park(TM) (a joint venture with Forest City); Palm Meadows Training
Center; Lone Star Park; AmTote International, XpressBet(R); and a holdback note
associated with the sale of The Meadows. The aggregate offer price for the
assets is $195 million and is payable in the form of $44 million cash, MID's
assumption of a $15 million capital lease and a $136 million credit bid of
MEC's existing indebtedness to MID. Under the agreement, MEC will seek Court
approval of a process to market these and other MEC assets and MID's offer may
be topped by third parties during the Chapter 11 auction process. MID will not
receive any termination fees if MEC sells any assets to a third party, but may
receive reimbursement for its expenses in connection with the Stalking Horse
Bid.

The terms of the Stalking Horse Bid were reviewed and recommended by the
independent directors of MEC and approved by the board of directors of MEC.

All of MEC's businesses, including racetracks, casinos, XpressBet(R), and its tote services company, AmTote International, remain functional and will
continue to conduct business as usual during the Chapter 11 proceedings.
XpressBet(R) is not one of the MEC subsidiaries making a Chapter 11 filing.
Further information about the Chapter 11 filing is available on MEC's website
at www.magnaent.com/restructuring.

After extensively exploring alternatives following thorough consultation with
its legal and financial advisors, MEC's board of directors determined that an
orderly sale of the Company's assets through a Chapter 11 process is the most
prudent and effective way to maximize value for MEC's stakeholders.

Frank Stronach, MEC's Chairman and Chief Executive Officer, commented,
"Simply put, MEC has far too much debt and interest expense. MEC has previously
pursued numerous out-of-court restructuring alternatives but has been unable to
complete a comprehensive restructuring to date due, in part, to the current
economic recession, severe downturn in the U.S. real estate market and global
credit crisis. This is a voluntary filing intended to utilize a Chapter 11
process that will allow us to continue to operate the business uninterrupted
while we implement a reorganization in a court-supervised environment. We
expect that all employees, customers and horsemen will continue to be paid in
the normal course along with all post-petition vendor obligations." MEC also announced that one of its subsidiaries in Austria has entered into
an agreement to sell to a subsidiary of Magna International Inc. ("MI")
approximately 100 acres of real estate located at MI's European Head Office
complex in Oberwaltersdorf, Austria for a purchase price of 4.55 million Euros
(approximately US$5.7 million using prevailing currency exchange rates). The
closing of the transaction is expected to occur during the second quarter of
2009 following the satisfaction of customary closing conditions including
obtaining all necessary regulatory approvals. The sale transaction was reviewed
and recommended by MEC's independent directors after receiving legal advice and
appraisals of the property, and approved by the board of directors of MEC. The
sale was reviewed and recommended by a committee of MI's independent directors
after receiving independent legal advice and appraisals, and approved by the
board of directors of MI.

MEC will file a material change report as soon as practicable after issuing
this press release. The material change report will be filed less than 21 days
before the closing of the DIP Credit Agreement. The timing of the material
change report is, in MEC's view, both necessary and reasonable because the
terms were approved by MEC's board of directors on March 5, 2009 and MEC
requires immediate funding to address its liquidity requirements.

-bt-

sweet!

[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.

[slotdirt]

I've heard rumor Laurel Park is as good as gone.

[Pedigree Ann]

Originally Posted by slotdirt

I've heard rumor Laurel Park is as good as gone.

I thought MEC only ran the meets and didn't own the plants in Maryland.

[slotdirt]

I don't know, thought I saw an article on it in the Post. Let me do some digging.

[infield_line]

if the whole economy was not in collapse, you could imagine taking key tracks private with a LLC funded by horseplayers/owners/breeders....

oh well, our dreams are our only non-devalued currency at the moment...

I/L

[Rudeboyelvis]

Xpressbet.com should immediately change their name to wearenotMAGNAbet.com




*registers domain*

[phystech]

Originally Posted by Pedigree Ann

I thought MEC only ran the meets and didn't own the plants in Maryland.

Magna owns both Laurel and Pimlico, as well as the old Bowie Race Course which is now a training center.

I haven't heard a whole lot but one big thing I have heard - there's no racing on the schedule after the Preakness. Typically, Pimlico runs through Belmont Day.

[Round Pen]

If We could get Halsey Minor To Buy Gulfstream and Restore it to the way it used to be

[ForestofWonders]

Only 6 months of operating funds. What happens to the Breeder's Cup?

[Kasept]

Originally Posted by ForestofWonders

Only 6 months of operating funds. What happens to the Breeder's Cup?

Breeders Cup 'operates' the host track while it's there, and the Oak Tree Association is actually leasing Santa Anita at that time anyway. Shouldn't be any issue, but we'll see how it plays out. But the BCL people REALLY want this Cup at Santa Anita again.

[joeydb]

That "no races scheduled after the Preakness" news really scares me. I really would like to see Magna stabilize.

[tector]

I've uploaded a copy of their bankruptcy petition if anybody wants to see it.

http://www.mediafire.com/?sharekey=0...eada0a1ae8665a

(just ignore the ads on Mediafire)

[robfla]

Originally Posted by tector

I've uploaded a copy of their bankruptcy petition if anybody wants to see it.

Estimated creditors: 10,000 - 25,000

[Travis Stone]

Originally Posted by infield_line

if the whole economy was not in collapse, you could imagine taking key tracks private with a LLC funded by horseplayers/owners/breeders....

Racetrack ownership is a brutal way to jump into this business. The model racing lives on is rather flawed. It's exactly why other major gambling operations weren't busting down doors to buy tracks until the ching-ching slot machine came along.

[Left Bank]

Originally Posted by Travis Stone

Racetrack ownership is a brutal way to jump into this business. The model racing lives on is rather flawed. It's exactly why other major gambling operations weren't busting down doors to buy tracks until the ching-ching slot machine came along.

True statement,but now it is time for all the big shots who have been shooting their mouths off about buying racetracks to "Walk the walk".They now have their choice of some prime racing facilities and dates to buy,and most likely could come close to naming their own terms/price.It will be interesting to see who steps up to the plate

[Kasept]

Magna Chapter 11 Filing Does Number on Racing
By Andrew Beyer

http://www.washingtonpost.com/wp-dyn...030601833.html

HALLANDALE BEACH, Fla. The bankruptcy of the Magna Entertainment Corp. -- owner of some of America's most famous racetracks -- was not another case of a company ruined by executive greed. On the contrary.

[Pedigree Ann]

Originally Posted by phystech

Magna owns both Laurel and Pimlico, as well as the old Bowie Race Course which is now a training center.

I haven't heard a whole lot but one big thing I have heard - there's no racing on the schedule after the Preakness. Typically, Pimlico runs through Belmont Day.

"MEC acquired a majority interest in the operations of Laurel and its sister track, Pimlico, in November 2002." its says on the MEC tracks site.

Whereas, the same site says, "MEC acquired Gulfstream Park in September 1999."

This sounds to me like MEC only holds the license and runs the racing and doesn't actually own the facilities. This is what I recall from when they made their deal with another lousy manager of tracks, the younger Mr. de Francis. But without the licensee, the track can't run, so it amounts to the same thing.

[phystech]

Originally Posted by Pedigree Ann

"MEC acquired a majority interest in the operations of Laurel and its sister track, Pimlico, in November 2002." its says on the MEC tracks site.

Whereas, the same site says, "MEC acquired Gulfstream Park in September 1999."

This sounds to me like MEC only holds the license and runs the racing and doesn't actually own the facilities. This is what I recall from when they made their deal with another lousy manager of tracks, the younger Mr. de Francis. But without the licensee, the track can't run, so it amounts to the same thing.

I can assure you, Magna owns the facilties at Laurel and Pimlico. In fact, they also own the catering business that runs the bars and eateries at the tracks, they own the manure hauling, they own the vans that transport horses from Bowie to Laurel or Bowie and Laurel to Pimlico, etc. etc......