CHRB Calls Special Session on MEC Issues

CHRB Calls Special Session on MEC Issues
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With Magna Entertainment Corp. reportedly in financial peril, the California Horse Racing Board has called an emergency meeting March 6 to determine the status of the MEC-owned tracks in the state, Santa Anita Park and Golden Gate Fields, as well as the company's licensed advance deposit wagering entity, XpressBet.com.

Rumors of a potential bankruptcy for MEC have accelerated recently following the Feb. 18 termination of a proposed spin-off of the financially-troubled horse racing entity from its parent company, MI Developments. Both companies, which are chaired by Frank Stronach, said it would be unlikely new debt financing could be arranged.

MEC, which has a debt load estimated at about $600 million, has several loans due this month, including a $40-million line of credit on March 5. That loan, which is carried by a subsidiary of Bank of Montreal, is guaranteed by unspecified assets of both Golden Gate Fields and Santa Anita Park. Additionally, PNC Bank recently told MEC it was in default on a loan with certain of the company’s entities affiliated with the Maryland Jockey Club.

The CHRB is required by law to give 48 hours notice prior to a special meeting, which is set for 10:30 a.m. PST at Santa Anita's Baldwin Terrace Room. The audio portion of the meeting can be heard through the “Webcasts” link on the CHRB Web site (www.chrb.ca.gov).

In an advisory sent out March 4, the CHRB said it is "imperative" to call the meeting in order to "verify that funds held for the public and the horse-racing industry are fully protected."
 
The agenda follows.

Public Session:

1. Discussion and action by the Board regarding the race meet licenses and the Advance Deposit Wagering license granted to Los Angeles Turf Club, Inc., operating at Santa Anita Park and Pacific Racing Association, operating at Golden Gate Fields and XpressBet Inc. respectively, in light of the imminent filing for bankruptcy protection by licensees’ parent company, Magna Entertainment Corporation. 

2. Discussion and action by the Board regarding assurances from licensees Los Angeles Turf Club, Inc., Pacific Racing Association and XpressBet Inc. that the wagering public and horse racing industry participants are financially protected in the event the licensees parent company, Magna Entertainment Corporation, files for protection under federal bankruptcy laws. 

3. Discussion and action by the Board regarding contingency plans in the event Magna Entertainment Corporation is unable to secure “Debtor in Possession Financing,” including substitute race meet operators should licensees Los Angeles Turf Club, Inc., and Pacific Racing Association cease operations and Advance Deposit Wagering operations of XpressBet Inc. be suspended.

4. Public Comment: Persons addressing the Board under this item will be restricted to three (3) minutes for their presentation.

Ryan Conley contributed to this article.

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