AURORA, ON, March 23 /PRNewswire-FirstCall/ - MI Developments
Inc. ("MID") (TSX: MIM.A, MIM.B; NYSE: MIM) today announced that
the Plan of Reorganization in respect of Magna Entertainment Corp.
("MEC") and certain of its subsidiaries, jointly proposed by MEC,
MID and the Official Committee of Unsecured Creditors of MEC (the
"Creditors Committee"), was amended to provide for the transfer of
Maryland Jockey Club ("MJC") to MID. The original Plan, including
the litigation settlement to be implemented by the Plan, was
announced by MID on January 11,
2010.
Rather than being sold by MEC pursuant to an auction as
originally contemplated, MJC will form part of the assets of MEC
that are to be transferred to MID under the amended Plan. In return
for the transfer of MJC, MID will pay the secured and unsecured
claims of MJC creditors to the extent allowed or agreed in an
estimated amount of US$23 million to US$25
million. The amended Plan also provides that the amount to
be paid by MID to the non-MJC unsecured creditors of MEC pursuant
to the Plan will be increased from US$75
million to US$89 million.
Dennis Mills, MID's Vice-Chairman
and Chief Executive Officer, stated "We are excited about the
development opportunities represented by the land owned by MJC. The
land is comprised of 565 acres in three major properties well
located in the greater Baltimore-Washington area."
The acquisition of MJC by MID will be subject to forbearance
terms that will require that the MJC racing operations be brought
to a break-even status within three years and that accumulated
budgeted losses during that period will not exceed US$15 million without approval from the Special
Committee of the Board. In addition, any future gaming operations
at MJC will not be developed other than in combination with an
experienced and financially secure gaming co-venturer on terms
acceptable to the Special Committee. With respect to the other
non-real estate related MEC assets that will be transferred to MID
as contemplated by the Plan, MID intends to later announce certain
forbearance terms or funding limitations or other restrictions to
be approved by the Special Committee with respect to any future
investments by MID in, or loans to be made by MID in respect of,
such assets.
The amended Plan is subject to the confirmation of the
Bankruptcy Court. MID, MEC and the Committee, among others, have
entered into a Support Agreement pursuant to which, among other
things, MID and the Creditors Committee agreed to support the Plan
and MEC agreed to seek confirmation of the Plan by the U.S.
Bankruptcy Court on or prior to April 30,
2010. The Support Agreement may be terminated if, among
other things, the U.S. Bankruptcy Court denies confirmation of the
Plan.
The amended Plan was approved by the Board of Directors of MID
based upon a favourable recommendation from the Special Committee
of the Board.
About MID
MID is a real estate operating company engaged primarily in the
acquisition, development, construction, leasing, management and
ownership of a predominantly industrial rental portfolio leased
primarily to Magna International Inc. and its automotive operating
units in North America and
Europe. MID also acquires land
that it intends to develop for mixed-use and residential projects.
MID holds a majority equity interest in MEC, an owner and operator
of horse racetracks, and a supplier, via simulcasting, of live
horseracing content to the inter-track, off-track and account
wagering markets. MEC has filed a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Forward-Looking Statements: This press release may contain
statements that, to the extent they are not recitations of
historical fact, constitute "forward-looking statements" within the
meaning of applicable securities legislation, including the United
States Securities Act of 1933 and the United States Securities
Exchange Act of 1934. Forward-looking statements may include, among
others, statements relating to the MEC Chapter 11 Proceeding and
MID's participation therein and statements regarding MID's future
plans, goals, strategies, intentions, beliefs, estimates, costs,
objectives, economic performance or expectations, or the
assumptions underlying any of the foregoing. Words such as "may",
"would", "could", "will", "likely", "expect", "anticipate",
"believe", "intend", "plan", "forecast", "project", "estimate" and
similar expressions are used to identify forward-looking
statements. Forward-looking statements should not be read as
guarantees of future events, performance or results and will not
necessarily be accurate indications of whether or the times at or
by which such future performance will be achieved. Undue reliance
should not be placed on such statements. Forward-looking statements
are based on information available at the time and/or management's
good faith assumptions and analyses made in light of our perception
of historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate
in the circumstances, and are subject to known and unknown risks,
uncertainties and other unpredictable factors, many of which are
beyond MID's control, that could cause actual events or results to
differ materially from such forward-looking statements. Important
factors that could cause such differences include, but are not
limited to, the risks and uncertainties inherent in the MEC Chapter
11 Proceeding, including the success or timing of the
implementation of the Joint Plan of Reorganization of Affiliated
Debtors, the Official Committee of Unsecured Creditors, MID and MI
Developments US Financing Inc., the success or timing of the
auction of MEC's assets, and the outcome any proceedings related to
the MEC Chapter 11 Proceeding or MID's involvement therein
(including as a result of any objections raised with the Bankruptcy
Court), and the risks set forth in the "Risk Factors" section in
MID's Annual Information Form for 2008, filed on SEDAR at
www.sedar.com and attached as Exhibit 1 to MID's Annual Report on
Form 40-F for the year ended December 31,
2008, which investors are strongly advised to review. The
"Risk Factors" section also contains information about the material
factors or assumptions underlying such forward-looking statements.
Forward-looking statements speak only as of the date the statements
were made and unless otherwise required by applicable securities
laws, MID expressly disclaims any intention and undertakes no
obligation to update or revise any forward-looking statements
contained in this press release to reflect subsequent information,
events or circumstances or otherwise.
SOURCE MI Developments Inc.