01/18/2008 12:00AM

Court rules against Magna

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A Canadian court has ruled that Magna Entertainment Corp. wrongfully dismissed a former chief financial officer, Graham Orr, and owes him $1.6 million in severance pay and interest.

Madam Justice Gloria Klowak of Ontario Superior Court ruled that Magna breached Orr's employment contract with Magna Entertainment by moving him to a job at a related auto-parts company, Magna International, in March 2003. But after a temporary position was promised, Magna International never created a full-time position, and Orr was let go in 2003 without Magna Entertainment fulfilling the severance provisions of Orr's contract.

Orr had worked at Magna International since 1987 before moving to Magna Entertainment in 2002. The $1.6 million award represents two years of salary at Magna Entertainment plus 4 1/2 years of interest.

Magna Entertainment has lost $400 million over the past four years and is struggling to reduce a $700 million debt.