Magna Entertainment Corp., the bankrupt Canadian company that owns Maryland's thoroughbred racetracks and the Preakness Stakes, has withdrawn the tracks from an August auction of its assets, but city and state officials remain cautious about the future of those properties.
Venable partner Gregory Cross, who is representing Maryland in the case, was quoted in a May 1, 2009 article in the Maryland Daily Record about the Magna's last minute decision to withdraw the properties.
In mid-April, the Maryland legislature signed a bill designed to give the state eminent domain over the tracks. In response to Maryland's eminent domain bill, Magna submitted a court filing that said the law would have a "chilling effect" on Pimlico and would inhibit the sale process. According to the article, Magna's representation would not say if those moves were the cause of Magna's decision to remove the Maryland properties from the auction.
Cross, the head of Venable's Bankruptcy and Creditors' Rights practice, noted that the eminent domain law simply authorized the funding for Maryland to pay for the track if it were to seize it. "It's nonsensical to say that enabling legislation to pay a fair market value for the property in anyway chilled the bid," he said.
According to Democratic Gov. Martin O'Malley, Maryland racetracks generate an estimated 20,000 jobs and an annual economic impact of $1.5 billion and are an important asset for the state. "We are going to continue to be active in protecting the state's interest in Preakness and horse racing in Maryland and we will actively pursue our interests," said Cross.