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Whoa Horse! Could Fraud Allegations/Vegas Judge’s Ruling Stop Remington Park Sale?
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Magna Entertainment Corporation (MEC), the Canadian company that owns Oklahoma City’s Remington Park race track was stunned today by a Las Vegas bankruptcy judge's ruling, who ordered that a bombshell lawsuit by MEC’s creditors may proceed.
The ruling likely guarantees a financial press/media feeding frenzy, as the nation’s top money reporters, smelling scandal, jump headfirst into this developing story. And don’t be surprised if a critical review of the whole bankruptcy process and the sale of properties is undertaken, since whispers of irregularities surrounding the sale of racetracks have been circulating.
The Las Vegas lawsuit claims that for two years prior to Magna’s Chapter 11 bankruptcy filing in March, the company acted fraudulently, including dishonestly transferring $125 million in loan payments to a subsidiary of MI Development. It’s a business story hiding inside a sports wrapper, and there are very few reporters in the state who possess the type of experience to accurately analyze and communicate this type of transaction. Recently, an Oklahoma City business paper erroneously claimed that an agreement to sell Remington Park had been reached between Magna and a subsidiary of the Chickasaw Nation, although an ‘auction’ is still scheduled to be held on September the 6th under the supervision of the US Bankruptcy Court in Delaware, hardly a done deal. While today’s development almost certainly guarantees the developing scandal will make the front pages of the top business shows and publications, and while no one has alleged any wrongdoing on the part of the track or tribe, it will be interesting to see if the if the media in Oklahoma, who take copious amounts of advertising from both, will ever touch the story. Related:TradingMarkets.com: Global Gaming RP Sign Purchase Agreement for Remington Park Racetrack
UPDATE: Henry Does Blink. OKPNS Breaks Another One (6/7/08)
