Magna gets court OK to hold auction for Lone Star Park operator

By Caroline Salls

Pittsburgh, Sept. 23 - Magna Entertainment Corp. received court approval to hold an auction in connection with the proposed sale of its Lone Star Park operator MEC Lone Star, LP, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Global Gaming LSP LLC is the stalking horse bidder with a $27 million offer.

If Global Gaming is not the high bidder at auction, Magna will pay it a $540,000 break-up fee and reimburse up to $250,000 of its sale-related expenses.

The auction will be held on Oct. 7, and the sale hearing is scheduled for Oct. 14.

Competing bids are due by 5 p.m. ET on Oct. 5 and must be equal to the amount of the stalking horse bid, plus the termination payment and $250,000.

Subsequent bids at auction must be in minimum increments of $250,000.

All bids must include a 10% deposit.

Magna, an Aurora, Ont.-based owner and operator of horse racetracks, filed for bankruptcy on March 5, 2009. Its Chapter 11 case number is 09-10720.

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