Witnesses in Magna bankruptcy say settlement is best recovery option for creditors
By Randall Chase, APThursday, April 22, 2010
Hearing continues on Magna reorganization
WILMINGTON, Del. — Financial advisers in horse track owner Magna Entertainment Corp.’s bankruptcy case say creditors will fare better in the company’s reorganization plan than they would from additional sales of its assets.
The advisers testified Thursday at a hearing to determine whether a Delaware judge should approve Magna’s reorganization plan. The plan is contingent upon resolution of a lawsuit by Magna’s committee of unsecured creditors accusing Magna’s parent company, MI Developments, of sham financial transactions.
If the lawsuit is dropped, MI Developments would pay $89 million to holders of general unsecured claims against Magna while acquiring several of its assets, including the Maryland Jockey Club’s Pimlico track in Baltimore, home to the Preakness Triple Crown Race.
