I may be wrong, but if Magna doesn't sell SA and GG (soon) and they go into default/bankruptcy, then the disposition of the properties becomes a matter of judges, creditors and lawyers. And that SA view of the mountains will make one more nice set of condo owners happy for a developer (even in this economy) who will see the $45 mill or so for SA as a pittance. A judge might well have to maximize the return to stakeholders (bond holders, promisory note holders) and sell to a developer despite the fuss that the horse people would put up.
jm
MAGNA Entertainment Corp worth peanuts
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Hold Your Peace
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Joltman wrote:I may be wrong, but if Magna doesn't sell SA and GG (soon) and they go into default/bankruptcy, then the disposition of the properties becomes a matter of judges, creditors and lawyers. And that SA view of the mountains will make one more nice set of condo owners happy for a developer (even in this economy) who will see the $45 mill or so for SA as a pittance. A judge might well have to maximize the return to stakeholders (bond holders, promisory note holders) and sell to a developer despite the fuss that the horse people would put up.
jm
You are exactly right.
The effects on horse racing will NOT be considered by the bankruptcy judges when they make decisions. Their decisions will solely be based on the maximum return to creditors.
The best approach, which is unlikely given the finances of most states and municipalities, is to look at racetracks like football stadiums which are frequently owned by states or municipalities and it makes sense for a state or city to have a racetrack or a stadium because of the positive economic effect of it existing.
We do have some precedent for that as Lone Star park is not owned by Magna but is instead owned by the city and 'leased' to Magna who operates a race meet there and who owns the racing license.
Since the state of California can't even pay for a box of paperclips right now I don't see them buying Santa Anita though.
And a sale of Santa Anita pre-bankruptcy is complicated as it is collateral on one of their loans.
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Bunty Lawless
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Hold Your Peace wrote:Joltman wrote:I may be wrong, but if Magna doesn't sell SA and GG (soon) and they go into default/bankruptcy, then the disposition of the properties becomes a matter of judges, creditors and lawyers. And that SA view of the mountains will make one more nice set of condo owners happy for a developer (even in this economy) who will see the $45 mill or so for SA as a pittance. A judge might well have to maximize the return to stakeholders (bond holders, promisory note holders) and sell to a developer despite the fuss that the horse people would put up.
jm
You are exactly right.
The effects on horse racing will NOT be considered by the bankruptcy judges when they make decisions. Their decisions will solely be based on the maximum return to creditors.
The best approach, which is unlikely given the finances of most states and municipalities, is to look at racetracks like football stadiums which are frequently owned by states or municipalities and it makes sense for a state or city to have a racetrack or a stadium because of the positive economic effect of it existing.
We do have some precedent for that as Lone Star park is not owned by Magna but is instead owned by the city and 'leased' to Magna who operates a race meet there and who owns the racing license.
Since the state of California can't even pay for a box of paperclips right now I don't see them buying Santa Anita though.
And a sale of Santa Anita pre-bankruptcy is complicated as it is collateral on one of their loans.
Yes, but also a good opportunity for racing investors to pool a resourceful investment in California racing. Do the banks really want to own any of these properties?
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Hold Your Peace
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I don't get all the worry about MEC...
As a recent newspaper article pointed out...
"...That triggered US$274-million worth of debt repayments due to MID by March 20. MEC also has until March 5 to pay back a separate US$40-million bank loan."
Stronach controls Magna International
Stronach controls MID
MID controls MEC
Stronach controls everything in his empire....
I'm pretty sure Herr Stronach could pay the $40 million to the Bank of Montreal from the change that fell out of his jeans in the dryer (120 mares bred by Awesome Again at advertised $125K + Ghostzappers 116= round numbers $20-30 million right there ) So I guess the other $274 million MEC owes to MID is the "problem"....
So if they were actually to file some sort of bankruptcy, the biggest (only?) creditor is MID? (hmm that's MEC's controlling shareholder).... Who controls that again? (see above)
Of course these are supposed to be arms length companies, but you know, that's in theory.....
The BMO $40 million is borrowed against GG and SA, but no one is quite sure what the MID $274 Mil is backed with. ..... My guess.. MID eats it in some way, Greenlight Capital gets upset, but Stronach comes out of it down very little...
Of course it makes sense that they are trying to get out from under the debt without completely screwing up the corporate structure, but even if it implodes, to assume other vultures will be able to snap up these tracks is something I'll need to see in order to believe... I could be proven wrong, but that's my take....
Of course the other option is also mentioned in the article...
"Magna [auto's]’s corporate constitution allows the company to make investments in any non-automotive business of up to 20% of its "available equity" without holding a shareholder vote. At the end of its most recent fourth quarter, total shareholder equity was US$7.36-billion, meaning Magna could use as much as US$1.47-billion to fund investments outside its main car parts and assembly businesses."
Something tells me Stronach would rather play that unpopular card than fall on his sword and admit defeat with MEC. What will Magna Auto investors do, sell their shares in protest? I don't think he cares....
As a recent newspaper article pointed out...
"...That triggered US$274-million worth of debt repayments due to MID by March 20. MEC also has until March 5 to pay back a separate US$40-million bank loan."
Stronach controls Magna International
Stronach controls MID
MID controls MEC
Stronach controls everything in his empire....
I'm pretty sure Herr Stronach could pay the $40 million to the Bank of Montreal from the change that fell out of his jeans in the dryer (120 mares bred by Awesome Again at advertised $125K + Ghostzappers 116= round numbers $20-30 million right there ) So I guess the other $274 million MEC owes to MID is the "problem"....
So if they were actually to file some sort of bankruptcy, the biggest (only?) creditor is MID? (hmm that's MEC's controlling shareholder).... Who controls that again? (see above)
Of course these are supposed to be arms length companies, but you know, that's in theory.....
The BMO $40 million is borrowed against GG and SA, but no one is quite sure what the MID $274 Mil is backed with. ..... My guess.. MID eats it in some way, Greenlight Capital gets upset, but Stronach comes out of it down very little...
Of course it makes sense that they are trying to get out from under the debt without completely screwing up the corporate structure, but even if it implodes, to assume other vultures will be able to snap up these tracks is something I'll need to see in order to believe... I could be proven wrong, but that's my take....
Of course the other option is also mentioned in the article...
"Magna [auto's]’s corporate constitution allows the company to make investments in any non-automotive business of up to 20% of its "available equity" without holding a shareholder vote. At the end of its most recent fourth quarter, total shareholder equity was US$7.36-billion, meaning Magna could use as much as US$1.47-billion to fund investments outside its main car parts and assembly businesses."
Something tells me Stronach would rather play that unpopular card than fall on his sword and admit defeat with MEC. What will Magna Auto investors do, sell their shares in protest? I don't think he cares....
Yet another wild card is the implosion og the US auto industry which is a major source of income for MID. The equity in any of these companies, like the banks that lend them money, is falling into an abyss.
Back in the WWII my dad marched around the SA track in the Army. Maybe the Army buy it and would make it a base again. Such a project could qualify as 'shovel readyy'. In fact there are many shovels at SA already.
jm
Back in the WWII my dad marched around the SA track in the Army. Maybe the Army buy it and would make it a base again. Such a project could qualify as 'shovel readyy'. In fact there are many shovels at SA already.
jm
Run the race - the one that's really worth winning.
Per the bloodhorse article...
"and that more than half of MEC’s $600 million in debt is owed to MID."
Does anyone know who holds the rest of the MEC debt? Is that $600 million accurate? I don't think I've heard it being that high before...
$40 million- CDN bank
+/- $300 million- MID
$260 million- ?
If the total debt is $600 million, I'll likely have to soften my stance per the post above
Yes, $600 million, if accurate, would fit my personal definition of "crushing debt".....
"and that more than half of MEC’s $600 million in debt is owed to MID."
Does anyone know who holds the rest of the MEC debt? Is that $600 million accurate? I don't think I've heard it being that high before...
$40 million- CDN bank
+/- $300 million- MID
$260 million- ?
If the total debt is $600 million, I'll likely have to soften my stance per the post above
Yes, $600 million, if accurate, would fit my personal definition of "crushing debt".....-
Hold Your Peace
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zinn21 wrote:My sources tell me Halsey Minor met with former Pacific Racing stockholder/board member Ron Volkman two weeks ago midweek at GGF. He and Volkman spent the day there. So it sounds like Minor has some interest in one of the Magna racetracks.
Too bad that Minor doesn't have the money though.
If he defaulted on a $25 million credit line from Merrill Lynch, how's he going to buy a racetrack or get anyone to lone him the money to do it?
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st. louis kid
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Minor's share of the sale to cbs was about 150 million. He has since gotten divorced and gave his ex wife half his assets including a 30 mil. home in San Fran.
He has been spending money like water since his divorce, and is in big trouble with the hotel in Charlottesville he was building, can not get financing to complete the project. Doubt he will be much of a savior.
He has been spending money like water since his divorce, and is in big trouble with the hotel in Charlottesville he was building, can not get financing to complete the project. Doubt he will be much of a savior.
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Bunty Lawless
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Joltman wrote:Yet another wild card is the implosion og the US auto industry which is a major source of income for MID. The equity in any of these companies, like the banks that lend them money, is falling into an abyss.
Back in the WWII my dad marched around the SA track in the Army. Maybe the Army buy it and would make it a base again. Such a project could qualify as 'shovel readyy'. In fact there are many shovels at SA already.
jm
Instead of electric cars, we should go back to horses. Real green and it would solve the problem of all the horses that have no place to go.