A scheduled March 25 auction of the Maryland Jockey Club, which consists primarily of the Pimlico and Laurel Park racetracks, has been called off after it was announced that the tracks would be purchased by the parent of the current operators.
According to published reports, MI Developments, the parent of bankrupt Magna Entertainment, has entered into an agreement with creditors that would result in MID assuming ownership of the MJC.
The Baltimore Sun reported the agreement calls for MID to pay $89 million to settle a lawsuit filed by MEC’s unsecured creditors committee. In addition, MID will pay about $13 million to cover unsecured claims of PNC Bank, and about $6 million for holders of unsecured claims against MJC. The agreement must be approved by a bankruptcy judge.
Among the six entities that had submitted bids to purchase MJC from Magna were Penn National Gaming Inc., the Cordish Companies, Blow Horn Equity, and Joseph De Francis and family.
The agreement, under which MID will assume MEC’s Maryland operations, came after it was announced that Joseph De Francis and his sister, Karin, had settled a lawsuit over revenues from any future slots operations at the tracks.
Under that agreement, the Sun reported, the De Francis siblings could receive $8 million from Magna and $4 million from the Maryland Jockey Club. The two would also receive 15% to 25% of the proceeds of the sale of the tracks if the total is more than $39 million. If the tracks MEC’s parent company, outside of the auction process or if the total auction price is less than $39 million, the De Francis family could receive $1 million, according to the newspaper.
MEC had entered into a deal with Joseph and Karin De Francis over future slots revenues when the siblings sold MJC to the Frank Stronach-controlled Magna in 2002. According to the Sun, a bankruptcy judge had ruled in January that MEC could end the profit-sharing agreement.