bankruptcy

Table games could save Rosecroft

Officials at Rosecroft Raceway in Prince George’s County say the closed harness racing track may still have a chance to be reincarnated as a table games destination.

When the track closed July 1, owner Cloverleaf Enterprises Inc. said it would convert from a Chapter 11 bankruptcy to a Chapter 7 bankruptcy and auction off the track. Potential buyer Mark Vogel also said the track was losing too much money for him to keep investing and that he could no longer afford the monthly mortgage payments.

But now the Greenbelt-based developer says he is still making the track’s mortgage payments and is in talks with a few interested gaming partners and “in advanced discussions” with one.

Judge: Rosecroft antitrust suit can proceed

An antitrust suit against the Maryland thoroughbred industry filed by the bankrupt owner of a Prince George’s County harness racing track is still alive.

A federal judge has ruled that Cloverleaf Enterprises Inc., which shuttered Rosecroft Raceway last month, has put forth enough evidence to allow the case to go forward. But U.S. District Judge Richard D. Bennett noted several times in his opinion that his ruling was based on whether Cloverleaf had enough of a claim to proceed.

He noted it is rare to dismiss antitrust cases before the discovery stage.

“An antitrust complaint should not be dismissed … ‘merely because the court doubts the plaintiff will ultimately prevail,’” Bennett wrote, citing a 1976  Supreme Court case against a private hospital in Raleigh, N.C.

Bennett’s opinion, issued last week, was in response to a motion to dismiss filed by defendants Maryland Jockey Club, the Maryland Thoroughbred Horsemen’s Association and others.

Judge OKs transfer of Laurel and Pimlico

By Liz Farmer
Daily Record Business Writer

WILMINGTON, Del. — A judge Monday approved Magna Entertainment Corp.’s reorganization plan, which includes the transfer of Maryland’s race tracks to parent company MI Developments Inc.

That means that by the time the Preakness Stakes is run on May 15, Pimlico Race Course will be under new ownership for the first time in nearly eight years.

MID hopes to take ownership of five tracks, including Laurel Park and Pimlico in Maryland, by Friday night pending gaming licensing approval in Florida, according Magna attorney Brian Rosen.

Rosen said after the Monday hearing in U.S. Bankruptcy Court in Delaware that Magna would agree to the language changes in the track’s confirmation plan outlined in Judge Mary F. Walrath’s ruling.

“We’re all going to get it done,” said Rosen, when asked how fast Magna could work to get the necessary changes by the end of the week.

Penn National Gaming could run Laurel slots

By Liz Farmer
Daily Record Business Writer

If slots were to come to Laurel Park, prospective owner MI Developments Inc. would like to have Penn National Gaming operate the casino.

WILMINGTON, Del. — Testimony during Thursday’s hearing to confirm Magna Entertainment Corp.’s reorganization plan for Maryland’s race tracks revealed more details on the company’s initial efforts to sell its assets and what could be in store for Laurel Park.

If Magna’s plan to transfer assets to parent MI Developments Inc. is approved, the future could include Penn National Gaming operating slots at Laurel Park — if the track succeeds in obtaining a gaming license.

“MI Developments has plans to have Penn National step in for the Maryland Jockey Club,” said Marc D. Puntis, managing director of investment banking firm Miller Buckfire & Co., which manages Magna assets.

The jockey club operates Laurel Park, Pimlico Race Course and Bowie Training Center and is owned by Magna. MID is slated to take on a large percentage of Magna’s portfolio, including the Maryland properties, Golden Gate Fields and Santa Anita Park in California and Gulfstream Park in Florida.

William B. Bayne, testifying on behalf of equity shareholders objecting to Magna’s plan, said that in his conversations with MID Chairman Frank Stronach, Penn National would be a majority interest holder in gaming.

Preakness rights assured for Maryland

By Liz Farmer
Daily Record Business Writer

WILMINGTON, Del. — Tuesday’s hearing seeking approval for the sale of Laurel Park and Pimlico Race Course was marked by extensive testimony on the tracks’ financial details and their potential value with slots, as well as an assurance that the state would keep its right of first refusal to the Preakness .

 Ontario-based Magna Entertainment Corp., the bankrupt owner of the tracks, is seeking confirmation of its reorganization plan after canceling an auction to sell its Maryland properties last month. That plan includes the transfer ownership of five of its race tracks and other assets to parent company MI Developments Inc. in exchange for assuming unsecured debt and settlements.

After hearing more than four hours of testimony in the U. S. Bankruptcy Court in Delaware from two company officials and a representative for the unsecured creditors committee, Judge Mary F. Walrath continued the hearing to Thursday morning.

“It’s been a long and windy road to get to this point,” said Magna’s attorney, Brian Rosen. “And without one brick, this plan will falter and the foundation will not survive.”

Rosecroft Raceway sale blocked

By Liz Farmer
Daily Record Business Writer

A bankruptcy judge has denied the proposed sale of Rosecroft Raceway to developer Mark Vogel, calling it a “sell out” that’s unfair to the track’s creditors and the harness racing industry. The track’s owners must instead sell Rosecroft through a traditional Chapter 11 reorganization plan.

Meanwhile, Rosecroft owner Cloverleaf Enterprises Inc. notified its employees and shareholders Monday that if the track does not succeed with its legislative initiatives this session, which ends April 12, Rosecroft will close on April 19.

Cloverleaf’s notice portrayed the sale to Vogel as an option for the track’s immediate survival that had been eliminated. While Vogel remains an interested buyer, the notice said legislation, which includes legalizing poker at the track, is the remaining course for keeping the track open.

Former owner says he has tentative Rosecroft deal

LIZ FARMER
Daily Record Business Writer
June 24, 2009 2:55 PM

The former owner of Rosecroft Raceway says he has reached a deal to buy back the bankrupt harness racing track in Prince George’s County — but the Greenbelt developer is still far from clearing another hurdle in bringing live racing back to the track.

Mark R. Vogel, who owned the track in the late 1980s and early 1990s, said Rosecroft parent Cloverleaf Enterprises Inc. has agreed to a deal to sell the track. Vogel declined to reveal the terms and referred all questions to Cloverleaf President Kelley Rogers, who did not return calls Wednesday.

The sale would need to be approved by the Cloverleaf board of directors, which Vogel expects, and the judge overseeing Cloverleaf’s bankruptcy case in the U.S. Bankruptcy Court for the District of Maryland in Greenbelt. Vogel’s race track license would also have to be approved by the Maryland Racing Commission.

Vogel in talks for Rosecroft Raceway

LIZ FARMER
Daily Record Business Writer
June 19, 2009 8:41 PM

A Greenbelt-area developer with a mottled past as the former owner of the now-bankrupt Rosecroft Raceway is in talks to again purchase the Prince George’s County harness racing track.

But the move could hinge on whether the thoroughbred industry will reauthorize the track’s right to broadcast and take bets on their races.

Mark R. Vogel, president of Mark Vogel Cos. LLC, has been meeting with representatives of the raceway and the thoroughbred industry for about two months to discuss a sale, said Gerald E. Evans, an attorney who is advising Vogel in the negotiations.

“We are trying to settle the long-simmering dispute between Rosecroft and the thoroughbred industry about the simulcast agreement,” Evans said. “If Mark can pull it off I think he’ll start live racing again ... and I think he’d be a terrific owner.”

Pimlico, Laurel, Preakness out of auction, but not off the block

LIZ FARMER
Daily Record Business Writer
May 4, 2009 1:56 PM

WILMINGTON, Del. – Although Maryland’s thoroughbred racetracks and the Preakness Stakes have been scratched from the auction block, the tracks’ bankrupt owner and its creditors would still entertain bids for the properties, their attorneys told a Delaware bankruptcy judge Monday.

Maga Entertainment attorney Brian S. Rosen (left) and Kenneth H. Eckstein, who represents the company’s unsecured creditors, after Monday’s bankruptcy hearing.“By no means are we abandoning the possibility that we can sell those assets in the future,” said Magna Entertainment Corp. attorney Brian S. Rosen of New York-based Weil, Gotshal & Manges LLP. “We are going to permit parties to do due diligence, and in the extent that a bid comes in that is attractive, the debtors will consider it.”

Kenneth H. Eckstein, who represents the unsecured creditors committee, said that although Magna was withdrawing some highly prized assets from its auction plan — namely, Pimlico Race Course, Laurel Park and the Preakness — the group approved of streamlining the process for now.

Magna removes Laurel, Pimlico and Preakness from auction list

LIZ FARMER
Daily Record Business Writer
May 1, 2009 6:43 PM

In a last-minute move, Magna Entertainment Corp. has taken Maryland’s thoroughbred racetracks and the Preakness Stakes off the auction block, but city and state officials remain cautious about the future of those properties here.

Magna, which had included Laurel and Pimlico racetracks and the Preakness in its list of assets it wanted to auction, has removed those properties from its assets up for sale in its revised auction procedures proposal submitted late Friday afternoon.

The properties belong to the Maryland Jockey Club, which was the Magna asset removed from the auction proposal. The Bowie Training Center in Prince George’s County is also no longer up for auction.

“We are still looking at our alternatives with respect to those assets, and it is unclear what value can be generated,” said Magna’s attorney, Brian S. Rosen of Weil, Gotshal & Manges LLP in New York. “Pimlico, with the Preakness, for 364 days a year it lives on that one day a year, and we’re trying to see if there something else that can be done to those assets.”

That includes looking at slots options and further discussions with the state, Rosen said.

Magna can’t bundle properties

LIZ FARMER
Daily Record Business Writer
April 20, 2009 8:31 PM

The state’s position in its fight to keep the Preakness Stakes got a little stronger Monday after a judge ruled that Magna Entertainment Corp.’s Maryland properties could not be bundled with its out-of-state properties in the bankruptcy auction process.

If bankruptcy judge Mary F. Walrath hadn’t ruled in Maryland’s favor, there’s no way the state could have matched bids for the Preakness, Pimlico Race Course and Laurel Park, said Raquel Guillory, spokeswoman for the Office of the Attorney General.

“It seems clear that the company is now seriously taking into account the importance of the state’s regulatory and public interest of the racing industry here in the state and it’s certainly a welcome move,” she said.

City officials look for legal ways to keep Preakness at Pimlico

LIZ FARMER
Daily Record Business Writer
April 10, 2009 3:54 PM

In an attempt to secure Pimlico Race Course’s future as host track of the Preakness Stakes, Baltimore officials are looking at other legal avenues to give the future owner more incentive to keep the race there.

According to City Solicitor George Nilson, the city is considering changing the track’s zoning designation to allow for retail and mixed-use properties to increase the value of the 116-acre site — but there’s a catch.

The winning bidder for the track must plan on keeping Preakness, the second leg of racing’s Triple Crown and the industry’s biggest moneymaker in the state, at Pimlico.

“It’s a big piece of land and it’s underutilized space — generally used once a year as parking for Preakness,” Nilson said last week. “There are commercial uses that could be put on the property ... that would create more density and more variety of uses while being sensitive to neighborhood ... and we’d make that available if the owner were to continue to run Preakness there.”

Nilson said city officials planned to meet this week to discuss more specific possibilities and that their next move had not been finalized yet.

Legislation seeks to keep Preakness in Maryland

ANDY ROSEN and LIZ FARMER
Daily Record Business Writers
April 8, 2009 9:36 AM

ANNAPOLIS — Gov. Martin O’Malley on Wednesday began a late-session push for stronger state control over the fates of Pimlico and Laurel racetracks and the Preakness Stakes.

All three properties are owned by Magna Entertainment Corp., which has filed for federal bankruptcy protection in Delaware. The company is asking for an auction of its assets, including the Maryland tracks, on July 30, and uncertainty over the future of the Preakness — the second jewel in horse racing’s Triple Crown — has raised increasing concern with city and state officials.

A bill proposed by O’Malley and introduced Wednesday would give the state power to seize the tracks through eminent domain, and would also give the Maryland Economic Development Corp. the authority to issue debt to buy the tracks. The state already has the right of first refusal over the sale of Preakness, but some are concerned about how that would play out in bankruptcy court.

Tracks draw interest from 2 prominent Baltimoreans

LIZ FARMER
Daily Record Business Writer
April 2, 2009 6:21 PM

With another Baltimorean showing interest in rescuing Laurel Park and Pimlico Race Course, keeping the Preakness Stakes from leaving the state may easier than solving the long-term problems of the Maryland racing industry.

“The state is going to have to come to grips with how to save racing in the state — we can’t just do it with keeping 40 racing days at Laurel and one race [Preakness] at Pimlico,” Alan Foreman, general counsel for the Maryland Thoroughbred Horsemen’s Association, said Thursday.

A spokesman for Baltimore developer David S. Cordish said Thursday that Cordish plans to bid for Pimlico, Laurel, the Preakness and the Bowie Training Center, which Magna Entertainment Corp. has put up for sale. Magna, more than $553 million in debt when it declared bankruptcy on March 5, is accepting bids for its assets until July 8.

Orioles owner Peter G. Angelos also met with state officials last month to offer his help in ensuring the second jewel of racing’s Triple Crown stays here.

Senate President Miller: Buy Preakness, build track if Magna sells

LIZ FARMER
Daily Record Business Writer
March 17, 2009 8:05 PM

Maryland Senate President Thomas V. Mike Miller Jr. said Tuesday that the state should consider building a racetrack and buying the Preakness Stakes if Pimlico’s bankrupt owner is forced to sell it.

Alan Forman, general council for the Maryland Thoroughbred Horseman's Association, speaks to the Maryland Racing Commission during Tuesday’s meeting at Laurel. Commission Chairman John B. Franzone, left, and Commissioner Louis Ulman listen.But at a meeting of the Maryland Racing Commission later in the day, Maryland Jockey Club owner Tom Chukas said it is “business as usual” right now.

“The bottom line is Maryland live racing will continue, simulcasting will continue and Preakness will continue,” he said.

Chuckas noted that since parent company Magna Entertainment Corp. declared bankruptcy on March 5, the Jockey Club has received a $13.4 million loan to continue operations while the corporation reorganizes.

Miller, D-Calvert and Prince George’s, told reporters Tuesday morning that building a track and buying the Preakness, by far Pimlico Race Course’s biggest money-maker, would be “last ditch” options the state might have to consider to keep Preakness here.

Racing is important to Maryland, Miller added, pointing to stories about George Washington coming from Virginia to wager on horses in Annapolis.

Pepsi wants its products back from Magna

LIZ FARMER
Daily Record Business Writer
March 10, 2009 12:33 PM

With the owner of Laurel and Pimlico race tracks filing for bankruptcy, Pepsi is asking Magna Entertainment Corp. to return nearly $45,500-worth of product recently delivered to Maryland tracks and others across the country.

The Pepsi Bottling Group filed a notice in bankruptcy court Monday asking for the return of products it delivered to the company’s U.S. tracks in the 45 days before the Canadian-based company — North America’s biggest race track owner — filed for bankruptcy last Thursday.

According to the reclamation demand, Pepsi made eight deliveries to the Maryland Jockey Club, Laurel Park, Pimlico Racecourse and Bowie Training Center between Jan. 29 and Feb. 20 totaling $1,583.

A reclamation demand is the right of a vendor to reclaim goods sold to a financially insolvent buyer.

After bankruptcy filing, Magna to seek approval to sell all its assets

LIZ FARMER
Daily Record Business Writer
March 5, 2009 1:54 PM

The future of horse racing in Maryland lurched further toward uncertainty Thursday after the owner of Laurel Park and Pimlico Race Course filed for bankruptcy. Magna Entertainment, the company that owns Laurel and Pimlico racetracks, has filed for bankruptcy protection.

To raise cash, Magna Entertainment Corp. said it was selling its race tracks in Florida, California and Texas to its parent company, and would seek court approval to market its “other” assets — including Laurel and Pimlico — during the Chapter 11 process.

The prospect of Pimlico, home of the Preakness Stakes and the biggest racing day in Maryland, and Laurel Park being up for grabs to the highest bidder has state racing officials upset.

“The thing that concerns me is we don’t know who that could be, and someone could come in and ... run [races for] three weeks at Pimlico because the Preakness is a gold mine, then stay dark the rest of the year,” said John Franzone, chairman of the Maryland Racing Commission. “And that’s not acceptable by any means.”