Attached files
| file | filename |
|---|---|
| EX-2.1 - EX.2.1 - JOINT PLAN - MAGNA ENTERTAINMENT CORP | mm08-1110_8ke021.htm |
| EX-99.1 - EX.99.1 - ORDER - MAGNA ENTERTAINMENT CORP | mm08-1110_8ke991.htm |
| EX-99.2 - EX.99.2 - MAGNA ENTERTAINMENT CORP | mm08-1110_8ke992.htm |
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of Report
(Date of Earliest Event Reported): April 28, 2010
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REORGANIZED
MAGNA ENTERTAINMENT CORP.
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(Exact Name
of Registrant as Specified in its Charter)
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Delaware
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(State or
Other Jurisdiction of Incorporation)
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000-30578
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98-0208374
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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455 Magna
Drive, Aurora, Ontario, Canada
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L4G
7A9
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(Address of
Principal Executive Offices)
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(Zip
Code)
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(905)
726-2462
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(Registrant’s
Telephone Number, Including Area Code)
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Magna
Entertainment Corp.
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(Former Name
or Former Address, if changed since Last
Report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Item
1.03.
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Bankruptcy
or Receivership
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Commencing on March
5, 2009, Magna Entertainment Corp. (“Magna Entertainment”) and
certain of its subsidiaries (collectively, the “Debtors”) filed voluntary
petitions for relief under chapter 11 of title 11 of the United States Code (the
“Bankruptcy Code”) with
the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) (Case No.
09-10720). On April 29, 2010, the Bankruptcy Court entered an order
(the “Confirmation
Order”) confirming that certain Second Modified Third Amended Joint Plan
of Affiliated Debtors, the Official Committee of Unsecured Creditors, MI
Developments Inc. and MI Developments Transferee Inc. Pursuant to Chapter 11 of
the United States Code, dated April 28, 2010 (the “Plan”). The Plan
became effective and substantially consummated on April 30, 2010. On
April 29, 2010, certain of Magna Entertainment's equity holders commenced an
appeal of the Confirmation Order in the District Court of Delaware (the "District
Court"). Pursuant to the District Court's rules, all appeals
from the Bankruptcy Court are subject to mandatory mediation and the parties are
waiting for the District Court to appoint a mediator. The Debtors have filed a
motion requesting dismissal of the appeal. A copy of the Plan, as
confirmed by the Bankruptcy Court, and the Confirmation Order are annexed hereto
as Exhibits 2.1 and 99.1, respectively, and are incorporated herein by
reference.
Summary
of the Plan
The following is a
summary of the Plan and is qualified in its entirety by reference to the
Plan. Capitalized terms used but not defined herein shall have the
meaning set forth in the Plan.
The foundation of
the Plan was the compromise and settlement (the “Settlement”) of that certain
adversary proceeding, styled The Official Committee of Unsecured
Creditors of Magna Entertainment Corp., et al. v. MI Developments, Inc., MID
Islandi, Frank Stronach, Jerry D. Campbell, William Menear, Anthony R. Campbell
and W. Thomas Hodgson, Adversary Pro. No. 09-51523 (the “Committee Litigation”),
commenced by the Official Committee of Unsecured Creditors (the “Creditors’ Committee”) against
MID Islandi sf. (“MID
Islandi”),
the Debtors’ largest prepetition secured lender and the predecessor-in-interest
to MI Developments US Financing Inc. (“MID Transferee”), MI
Developments Inc. (“MID”), Magna Entertainment’s
controlling shareholder, and certain other individual third party
defendants. The Settlement resolved claims asserted by the Creditors’
Committee for, among other things, recharacterization and/or equitable
subordination of the MID Claims and claims for breaches of fiduciary duty by MID
and certain officers and directors of Magna. Given the size of the
MID Claims, and the fact that such claims were asserted as secured claims on
substantially all of the Debtors’ assets, absent the Settlement, general
unsecured creditors of each of the Debtors faced the possibility of receiving no
recovery on account of their claims.
Other than
Administrative Expense Claims, Priority Tax Claims, and the Debtors’
postpetition financing, the Plan divided claims and interests in the Debtors
into sixty-two (62) classes.
The assets and
liabilities of Magna Entertainment as of January 31, 2010 are described in
Schedule 3 to the Disclosure Statement for the Plan, a copy of which is annexed
hereto as Exhibit 99.2.
Unless otherwise
mutually agreed upon by the holder of a respective claim, the following claims
were paid in full, in Cash: (i) Priority Non-Tax Claims (Class 1), (ii) Wells
Fargo Claim (Class 3), (iii) PNC Claim (Class 4), (iv) BMO Claim (Class 5), and
(v) Secured Claims (Class 5). In full satisfaction and release of the
MID Claims (Class 2), the Plan provides that the holder of the MID Claims
received certain assets of the Debtors, including, among other assets, Santa
Anita Park, Golden Gate Fields, Gulfstream Park, The Maryland Jockey Club,
Portland Meadows, AmTote International, Inc. and XpressBet, Inc., as well as
certain proceeds from the sales of Lone Star Park and
Thistledown. The sale of Thistledown to a subsidiary of Harrah’s
Operating Company, Inc. was consummated July 28, 2010. Additionally,
pursuant to the Settlement, MID Transferee agreed to, and has paid, Eighty Nine
Million Dollars ($89,000,000.00) for distribution to holders of 8.55% Note
Claims (Class 7), 7.25% Note Claims (Class 8) and Non-MJC General Unsecured
Claims (Classes 9-26), as well as share certain proceeds from the sales of Lone
Star Park and Thistledown. MID Transferee also agreed to, and has
paid, holders of MJC Claims in full.
Immediately prior
to confirmation of the Plan, Magna Entertainment had 2,928,447 issued and
outstanding shares of Class A Subordinate Voting Stock and 2,923,302 issued and
outstanding shares of Class B Subordinate Voting Stock (collectively, the “Magna Entertainment
Stock”). Pursuant to the Plan, the Magna Entertainment Stock
was kept outstanding for regulatory purposes associated with the pending sale of
Lone Star Park and will be cancelled on the date that the sale of Lone Star Park
is closed. The Magna Entertainment Stock was
delisted
2
from the NASDAQ
Stock Market and Toronto Stock Exchange, effective March 16, 2009 and April 1,
2009, respectively.
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Item
9.01.
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Financial
Statements and Exhibits
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EXHIBIT
NUMBER
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DESCRIPTION
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2.1
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Second
Modified Third Amended Joint Plan of Affiliated Debtors, the Official
Committee of Unsecured Creditors, MI Developments Inc. and MI Developments
Transferee Inc. Pursuant to Chapter 11 of the United States Code, as
confirmed by the Bankruptcy Court on April 29, 1010.
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99.1
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Confirmation
Order.
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99.2
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Schedule 3 to
the Disclosure Statement for the
Plan.
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3
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
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REORGANIZED
MAGNA ENTERTAINMENT CORP.
(Registrant)
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August 12,
2010
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by:
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/s/ WILLIAM G. FORD | |
| William G. Ford, | |||
| Plan Administrator | |||
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