Wednesday, March 18, 2009
Magna Finally Faces Up to the Market
Probably figuring that its latest SEC filing would be thoroughly ignored amid all the focus on its bankruptcy, Magna Entertainment (MEC) filed a Form 8-K yesterday with the Securities and Exchange Commission in which it finally admitted that some of its race tracks and land holdings aren't worth anything like what Frank Stronach paid for them not all that long ago.
The 8-K, which is required whenever there is an event that materially affects a company's business, reports that on Monday MEC's audit committee approved a $136 million write-down in the value of the company's assets. In particular, the write-downs included the value of racing licenses for Lone Star Park in Texas, Golden Gate Fields in California, and the Maryland Jockey Club's tracks, Laurel and Pimlico. Other reductions in value were allocated to The Meadows harness track, to the now-shuttered operations at Portland Meadows and at Stronach's Austrian Racino, and to the value of land that MEC owns in Dixon, California, once the intended site of a thoroughbred track.
No mention in the SEC filing of the value of Santa Anita, Gulfstream or other Magna properties. But the unforgiving nature of bankruptcy proceedings may sooner rather than later show exactly how much of the value of MEC's assets as carried on its balance sheet has any relation to the real world.