State of Maryland Moves to Protect Legal Rights on Preakness
Governor Martin O'Malley and Attorney General Douglas F. Gansler announced today that the State of Maryland intends to protect the State's legal rights to keep the Preakness Stakes in Maryland. Today's action comes in response to Magna Entertainment Corporation's (Magna) Chapter 11 bankruptcy filing. Under current law, the State of Maryland maintains a statutory right of first refusal with respect to the Preakness, and must approve any licensee or any transfer of a license to engage in racing and related activities within the State of Maryland.
"The Preakness Stakes is not only one of Maryland's most treasured traditions, but an economic engine for the State, employing thousands of people and creating millions in economic activity each year," said Governor O'Malley. "Today, we are taking action to protect the State's rights to keep the Preakness in Maryland."
"By law, the State governs, regulates and polices all of Magna's operations in Maryland," said Attorney General Gansler. "The sale of Magna's assets must respect the State's legal rights and authority."
The State's filing today in the US Bankruptcy Court in Delaware is in response to motions filed by Magna earlier this month asking the bankruptcy judge to pre-approve a timeline and procedures to govern the bankruptcy. Magna's current proposal is that bidders must place bids by July 8; that bidders will be notified if their bids are qualified by July 20; that an auction will occur on July 30; and that the court hearing to approve the sale will occur on August 7.
gov holding trophy
The State objects to that motion on the following grounds:
* The State has police powers over racing, including the right to decide who can participate in racing in the State, and Magna cannot interfere with those rights by selling the tracks to a bidder of its choice;
* State law allows for the State to match any bid to buy the "Preakness Stakes," and Magna's filing does not take those matching rights into consideration; and,
* Magna's proposed rules and timeline governing the bankruptcy do not allow for transparency in the process, and allow Magna too much discretion to change the process at will and select the bidder of its choice.
* Magna, the owner of Pimlico, Laurel, and the Bowie Training Center, has filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware. Under a Chapter 11 filing, the debtor continues to operate its business under protection from its creditors while developing a plan to resolve its problems.
Next Friday, April 3, a U.S. Bankruptcy judge in Delaware will hear arguments on Magna's motion.