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    Golden Gate Fields owner files Chapter 11, plans sale

    Golden Gate Fields 090308

    Golden Gate Fields race track, one of the biggest businesses in Albany,  is facing an uncertain future as its owner filed bankruptcy papers last week. Photo by Linjun Fan. Article by Barbara Grady.

    The owner of the Golden Gate Fields race track filed for Chapter 11 Bankruptcy protection on Thursday and indicated in its court document that it hopes to sell the Albany race track.

    Magna Entertainment Corp.’s Chapter 11 petition submitted to U.S. Bankruptcy Court for the District of Delaware said it hopes to sell a number of assets, including the Golden Gate Fields, Gulf Stream Park in Florida, Lone Star Park in Texas and other parks and that it has a potential buyer for these properties.

    “An offer is on the table,” said Robert Hartman, general manager of Golden Gate Fields.

    Magna has entered a tentative sales deal with its largest creditor and shareholder MI Developments Inc. to buy those assets at an offering price of $195 million. But terms of the deal allow competing bids to be considered.

    Meanwhile, it will be “business as usual” at the race track while the negotiations and debt restructuring unfolds, Hartman said, with horse races continuing as scheduled and employees and winners getting paid.

    The deal with MI includes a loan to Magna to fund day-to-day operations while it reorganizes.

    Magna listed assets of $1.05 billion and debts of $959 million in its court filing.

    “Simply put, MEC has far too much debt and interest expense,” said its chairman Frank Stronach in a statement. He added that the severe economic downturn has further hurt business. The Ontario, Canada-based company said it will ask the Canadian Superior Court of Justice to recognize its U.S. Bankruptcy Court proceedings.

    In Albany, the future of Golden Gate Fields and particularly the waterfront land it controls has been a topic of heated debate for years. The City did not agree to zoning changes sought by a developer that would have allowed developing a retail and lodging complex on the property and instead began an envisioning process on how the city could preserve open park space there while still getting some revenue from limited development.

    Hartman said that Golden Gate Fields “is a profitable enterprise” that operates in the black. During the Chapter 11 proceedings it will continue to pay taxes to the City of Albany, he said, as well as employees’ salaries and betters’ winnings. A $62.5 million loan from MI will help assure this continuity.

    Chapter 11 of the U.S. Bankruptcy Code allows a petitioning company to reorganize and restructure its debt with court protection from creditor demands until the company completes its reorganization. Companies in Chapter 11 usually remain in business.

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