Magna’s Chapter 11 hearing on hold

WILMINGTON, Del. (AP) — A bankruptcy judge agreed Tuesday to postpone a hearing on a hedge fund’s request for the appointment of an examiner in horse track owner Magna Entertainment’s Chapter 11 bankruptcy case.

At the request of attorneys, a hearing originally scheduled for Tuesday on the request by Greenlight Capital Offshore Partners was postponed until Aug. 18.

Greenlight has asked for the appointment of an examiner or Chapter 11 trustee to investigate ties between Magna and its parent company, known as MID, which has played a dual role as both a potential bidder for Magna assets and one of its primary lenders.

Greenlight, an unsecured creditor of Magna as well as a large shareholder in MID, is concerned about the fairness of any asset sale.

Ontario-based Magna is the largest horse track owner in the United States. Its holdings include Remington Park in Oklahoma City, Golden Gate Fields in Northern California, Gulfstream Park in Florida, Lone Star Park in Texas and Baltimore’s Pimlico racetrack — host of the Preakness Stakes, the second leg of the Triple Crown.

Judge Mary Walrath already has approved sale of certain assets, including Santa Anita Park in California, Remington Park, Thistledown in Cleveland and Portland Meadows in Oregon, as well as Magna’s interest in Lone Star Park. Magna has said it may seek approval to sell other assets, including Pimlico, which previously was pulled from the list of assets to be sold.

Greenlight attorney Gregg Galardi noted Tuesday that the bid deadline for the initial asset sale is July 31, followed by the selection of a “stalking horse bidder” in early August.

“Much of what we are concerned about has still not transpired,” he told Walrath.

Magna contends it has taken several steps to address potential conflicts of interest involving MID and Frank Stronach, who is chairman of both Magna and MID. The company replaced Stronach as chief executive with Greg Rayburn, who has testified that Stronach would have to abstain from any decision or deliberations by the board regarding the sale of any assets.