Magna Sale
Magna Entertainment Corp. agreed in bankruptcy court Tuesday to postpone the sale of two Maryland horse tracks as it works with bidders to provide reassurance that the Preakness would remain in the state.
A Delaware bankruptcy judge also allowed Magna to end a profit-sharing agreement with Joseph A. De Francis and other former owners of Laurel Park and Pimlico Race Course, who had a previous agreement to split any potential proceeds from slot machine gambling.
One might think that a bankruptcy sale, with no strings attached, is the way to sell Pimlico. The problem here is that the State of Maryland has lived with the Colts fiasco for twenty years. The citizens of Maryland view the Preakness as a State Icon.
The problem in the process is that the common notion of bankruptcy is that assets are garnered and sold in order to maximize the value of the assets. However, a limitation on transfers inhibits optimizing value.
