Sale of Texas track to Chickasaws hits snag

Sale of Texas track to Chickasaw tribal subsidiary hits snag as judge reschedules auction

• By Murray Evans, Associated Press Writer
• On 5:44 pm EDT, Wednesday October 14, 2009

TULSA, Okla. (AP) -- A federal bankruptcy judge in Delaware ruled Wednesday that the auction of a Texas horse racing track should be rescheduled, delaying the hopes of a subsidiary of an Oklahoma-based American Indian tribe that wants to buy the facility.

Global Gaming LSP LLC, a subsidiary of the Chickasaw Nation, had agreed to pay $27 million to buy Lone Star Park in Grand Prairie, Texas, from Magna Entertainment Corp., which filed for Chapter 11 in March.

Court documents indicate a court-ordered auction of the track scheduled for this month was canceled, but a committee of Magna Entertainment's unsecured creditors asked U.S. Bankruptcy Judge Mary Walrath to reschedule, saying another company had submitted a higher bid.

Walrath rescheduled the auction for Oct. 23 in New York, Global Gaming LSP CEO John Elliott said.

"She has that discretion and she used it," Elliott said. "I think at this stage we're sort of regrouping and considering our options."

Walrath's court reporter did not immediately return a call on Wednesday.

According to a court filing by the unsecured creditors, there were two qualified bidders -- Global Gaming LSP and Wyomissing, Pa.-based Penn National Gaming Inc. The filing said Penn National Gaming complied with the court's rules for submitting its bid, but it was disqualified by Magna Entertainment because the deposit associated with the bid was partially refundable.

"Once Penn Gaming clarified that its intention was to qualify and to bid more once in an auction, it became apparent that the proper course of action was to reschedule the auction to permit both parties to bid," the filing said.

According to the filing, Penn National Gaming submitted an original bid of $28 million and later advised Magna Entertainment it was willing to bid $40 million for the track.

A spokesman for Penn National Gaming didn't immediately return a phone message left Wednesday.

Walrath last month approved the sale of another Magna Entertainment track, Remington Park in Oklahoma City, to another Chickasaw tribal subsidiary, Global Gaming Solutions RP, for $80.25 million.

Oklahoma Horse Racing Commission executive director Constantin Rieger said Global Gaming Solutions RP has applied for a state racing license. Elliott said Global Gaming officials will speak Thursday at a commission meeting in Oklahoma City to discuss their plans for Remington Park.

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