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Jockey Kent J. Desormeaux finishes first ahead of the pack riding "Big Brown" at the 133rd Preakness Stakes May 17, 2008, at Pimlico Race Track in Baltimore, Maryland. Getty Images/Paul J. RichardsPAUL J. RICHARDS/Getty Images

MI Developments Inc. will hang on to two more racetracks owned by its bankrupt Magna Entertainment Corp. (MEC) unit - including the facility that is the site of one of horse racing's glittering spectacles - giving the real estate company half the number of tracks MEC owned when it went into Chapter 11 protection last year in the United States.

The companies have scrapped an auction scheduled for Maryland tracks Laurel Park and Pimlico, which is the site of the Preakness, the second leg of thoroughbred racing's Triple Crown.

That means MI Developments, which is controlled by auto parts magnate Frank Stronach, will end up owning five tracks if the bankruptcy exit plan for MEC is approved by creditors next month. MI Developments was already scheduled to retain Gulfstream Park in Florida and tracks in Los Angeles and San Francisco in the original exit plan filed with the U.S. bankruptcy court in Delaware last month.

Tracks in Oklahoma, Texas, Oregon and Ohio have been sold or have deals pending. Mr. Stronach personally purchased Magna Racino near Vienna, Austria.

MEC fell into Chapter 11 bankruptcy protection last March after running up debts of more than $500-million (U.S.) to purchase the tracks and pursue Mr. Stronach's vision of racetracks as destinations for entire families, with shopping complexes, entertainment, gambling parlours and other commercial ventures attracting new customers.

MI Developments is keeping only those properties that have a "real estate upside," chief executive officer Dennis Mills said yesterday.

That upside in Maryland consists of about 240 hectares of excess land at the two tracks and a training centre in the Baltimore-Washington area.

Secured and unsecured creditors of Maryland Jockey Club - the MEC unit that controls the properties now - will receive between $23-million and $25-million.

Other unsecured creditors that are not part of the Maryland Jockey Club group will receive $89-million under the revised bankruptcy plan, up from $75-million originally. A group of unsecured creditors abandoned a lawsuit against Mr. Stronach and several MEC officers and directors in return for the payment.

When MEC went into bankruptcy protection, Mr. Stronach insisted there would be no "fire sale" of assets.

MEC appeared to maintain that view yesterday when its lawyer Brian Rosen told the court that bids to buy the two Maryland tracks were unacceptable.

As part of the Maryland deal, MI Developments is required to bring the horse racing operations it owns in the state to break-even status within three years.

The exit plan has not met with universal approval among creditors and shareholders of MI Developments and MEC.

Greenlight Capital Inc., a New York-based hedge fund that has been a strident critic of Mr. Stronach and has battled him in court on governance issues, is opposed to the exit plan, saying creditors don't have enough information to decide whether it makes sense.

With files from Bloomberg News

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