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DOVER — Pimlico Race Course in Baltimore and Magna Entertainment Corp.'s other horse racing assets in Maryland are off the auction block, at least for now.
In a filing submitted late Friday in its bankruptcy case, the company said it has dropped Pimlico, home of the second jewel of the Triple Crown, along with Laurel Park and a training center in Bowie, from the list of assets subject to a proposed sale.
The company said, however, that it will continue to explore "all alternatives with respect to the remaining assets."
Maryland officials, who have vowed to keep the Preakness and Pimlico in their state, greeted the news with cautious optimism.
"The governor sees it as a potentially positive sign in the process," Shaun Adamec, a spokesman for Maryland Gov. Martin O'Malley, said Saturday. "He's committed to ensuring that the Preakness remains in Maryland."
Greg Cross, an attorney representing the state of Maryland, refused to speculate on the reasons for MEC's filing or to discuss what steps Maryland might take next.
"What they're saying is they're uncertain as to what they want to do," Cross said. "We're going to continue to be active in connection with the bankruptcy case."
Magna officials did not immediately respond to messages seeking comment.
In addition to removing the Maryland tracks from the proposed sale, Ontario-based MEC also pulled a racetrack in Austria from the list of assets it proposes to sell. It also announced that MEC's parent company has decided not to participate in any sale.
The company did not give any reason in its court filing for changing the list of sale assets but indicated that it is proceeding with plans to sell Santa Anita Park in California, Remington Park in Oklahoma, Thistledown in Ohio and Portland Meadows in Oregon.
The company proposed that expressions of interest in any of the racetracks be submitted by May 27, with definitive bids due by July 31. With court approval, an auction would be held in New York City on Sept. 8, followed by a court hearing in Delaware on Sept. 11 to approve the auction results.
In its filing, Magna said it had worked diligently with financial advisers to explore alternatives to a sale, but that with $510 million in secured debt, a history of recurring net losses, and a lack of liquidity, an asset sale was the only option.
Magna, the largest horse track owner in the United States, also said it had taken several steps to ensure a fair sales process amid concerns about conflicts of interest stemming from MEC's relationship to its parent company, MI Developments, also known as MID, and Frank Stronach, who is chairman of both MEC and MID.
MID has played a dual role in the bankruptcy case as both a bidder for MEC assets and one of its primary lenders. A court-approved financing plan calls for $38.4 million to be provided to MEC by a subsidiary of MID, but MID last month withdrew a motion seeking approval of its stalking-horse bid for certain MEC assets, including Gulfstream Park in Florida and Golden Gate Fields in California. While citing objections from other parties as the reason it withdrew the motion, MID nevertheless said it would continue to evaluate whether to bid on Magna Entertainment assets.
In its filing Friday, Magna noted that Stronach has resigned as CEO of Magna, and that an independent director has been appointed to the board. Further, the board adopted a resolution Wednesday implementing a formal protocol for any discussions of the restructuring of any debt or the sale of any asset in which MID or any of its subsidiaries has a security interest.
"Still, recognizing that the lack of certainty with regards to MID's intentions, coupled with MID's ability to submit a credit bid, may discourage potential bidders from participating in a sale process for the assets, MID has confirmed in writing its intention not to bid on any of the assets ...," attorneys for Magna wrote.
The company noted, however, that MID's intention not to bid was subject to its ability to protect its secured claim status in the event of a potential "fire sale."
A hearing in the bankruptcy case is scheduled for Monday in Wilmington.
