MEC Seeks Court Help to Keep Breeders' Cup
by Ryan Conley
Date Posted: 4/24/2009 3:41:26 PM
Last Updated: 4/26/2009 7:37:53 PM

Magna Entertainment Corp. is asking a Delaware bankruptcy judge to approve an agreement to keep this year’s Breeders’ Cup World Championships at Santa Anita Park even if the Southern California track ends up in the hands of a new owner.

MEC filed a motion April 22 in U.S. Bankruptcy District of Delaware that included a stipulation agreement to honor the current agreement for the Breeders’ Cup, which is scheduled to be held Nov. 6-7 during the annual Oak Tree meet at Santa Anita.

The stipulation was signed by representatives for several groups, including Breeders’ Cup Ltd., MEC, and Oak Tree Racing Association, as well as two financial institutions carrying lien-carrying mortgages on Santa Anita Park, Wells Fargo Bank and Bank of Montreal.

U.S. Bankruptcy Judge Mary F. Walrath, who is presiding over MEC’s bankruptcy proceedings, signed an order setting a hearing on the motion for April 29.

MEC said in the motion that Breeders’ Cup officials had expressed “concerns” that the operating company of Santa Anita, the Los Angeles Turf Club, might reject the Oak Tree lease as part of MEC’s Chapter 11 bankruptcy reorganization, which was filed March 5.

The stipulation was developed to “provide assurance to Breeders’ Cup that the 2009 Breeders’ Cup will be held uninterrupted by any uncertainties due to the filing” of the bankruptcy, and “to prevent Breeders’ Cup from exercising rights” to conduct the event at “an alternate venue.”

Breeders Cup officials said recently they were supporting the effort to keep the World Championships at Santa Anita, but needed as quick a decision as possible if a new location was required. Churchill Downs, which will host the Breeders’ Cup next year, is the designated back-up location for this year’s event.

If the stipulation is approved, any purchaser of Santa Anita Park through a court-authorized auction or otherwise would be liable to honor leases for both the Breeders’ Cup and the Oak Tree meet, which is scheduled to run from Sep. 30-Nov. 8.

“Agreeing to the stipulation is in the best interest of the debtors’ estates, because hosting the 2009 Breeders’ Cup at Santa Anita Park is expected to yield a large profit for the debtors,” the motion said.

A total of $155,474,553 was wagered on the 2008 Breeders’ Cup, which was also held at Santa Anita, including an estimated $18 million in on-track handle. MEC’s lease agreement with Oak Tree calls for rent based on an undisclosed percentage of on-track handle and import/export signals, the motion said.

MEC will submit an altered plan for reorganizing its company prior to a May 4 hearing. The company's controlling shareholder, MI Developments, recently announced it withdrew its $195-million bid to acquire such properties as Golden Gate Fields, Gulfstream Park, and the lease on Lone Star Park, as well as well as totalizator company AmTote International and advance deposit wagering entity XpressBet.com, among others.

An MEC-affiliated attorney told those attending an April 24 creditors' committee meeting that the company is reviewing all its alternatives, including the selling assets, but had made no decisions, according to The Associated Press.



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