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Big Trouble at Lone Star Park

Posted on March 5th, 2009 6:27pm by Mike Hindman
Filed under Horse Racing

Magna Entertainment Corp., which owns the lease to conduct racing at Lone Star Park, filed for Chapter 11 Bankruptcy today.

LSP’s 2009 race meet is set to begin in on April 9, but this development could prevent that from happening.

In the past ten years, MEC has dramatically overextended itself acquiring race tracks across the country, including blue chip venues like Santa Anita Park in Arcadia, California, Gulfstream Park in Hallandale, Florida and historic Pimlico in Baltimore.

Along the way, the chairman of MEC — Canadian billionaire Frank Stronach — has used his foundation companies, Magna International and MI Developments, as his primary source of financing. But after years and years of steep losses and endless restructuring of loans, the shareholders of MI have finally put their collective foot down, forcing this bankruptcy action. The MEC tracks will ultimately be sold off in a restructuring plan.

LSP is unusual among the MEC racing assets in that neither the facility nor the land is owned by MEC.

The Grand Prairie Sports Facilities Development Corp., owner of the physical plant, has stated that they would attempt to conduct a race meet with or without Magna.

Whether a race meet can take place at LSP in April will be up to a bankruptcy judge (who will likely decide whether MEC will be allowed to continue to operate during restructuring) and the Texas Racing Commission which would have to approve any new licensee in the event that MEC is prohibited from conducting business at LSP.

8 Comments to “Big Trouble at Lone Star Park”

rangers85 @ March 5th, 2009 at 9:50 pm

According to LSP’s website, the horse track isn’t involved in the bankruptcy proceedings and none of the accounts and such dealing with LSP are involved in the bankruptcy proceedings. Thus they say races will go on as scheduled April 9th.

Good news, I enjoy going out there a couple times a season. Good cheap afternoon (I bet the minimum, then bet any winnings). At most that way you lose $25-30 for 4-6 hours of entertainment. For that same amount of cash, you barely can go to a movie anymore and that’s 1.5-2.5 hours.
robert_d_wilfong @ March 6th, 2009 at 12:11 am

@rangers85
“At most you lose $25-30 …”

And hence, MEC filed for bankruptcy
Mike Hindman @ March 6th, 2009 at 5:43 am

ranger85 — you believe what MEC says at this point? have they ever told the truth about anything?
FrontBurner » Blog Archive » Big Trouble at Lone Star Park @ March 6th, 2009 at 7:47 am

[...] problems. Mike Hindman has the scoop. Leave a [...]
Curtis Remington @ March 6th, 2009 at 10:32 am

Mike, you are so wrong. The track is not part of the filing because it is not an asset of the company. The Texas Racing Commission would most certainly give GP a license to run it if MEC can’t.
Big Trouble at Lone Star Park | ProducerLink @ March 6th, 2009 at 10:38 am

[...] Money problems. Mike Hindman has the scoop. [...]
KR @ March 6th, 2009 at 12:41 pm

Stronach’s daughter has repeated been linked as Bill Clinton’s girlfriend. http://www.thefirstpost.co.uk/2622,features,bill-and-belindas-excellent-adventure,2
Nick @ March 8th, 2009 at 8:28 am

@ robert_d_wilfong
Lone Star Park makes its money by you placing bets. They take their share and taxes out of every bet made. The money you win is the money of all the other bettor. Win or lost LSP has their money.