04/08/2009 11:00PM

Preakness eminent domain bill rankles Magna


Magna Entertainment Corp. and its bankruptcy attorneys criticized Maryland Gov. Martin O'Malley's bid Wednesday to assert eminent domain powers over the Preakness Stakes at Pimlico Race Course, saying passage of the legislation could lead to more litigation.

The governor and lawyers for the state said the proposed law - which has the backing of legislative leaders - is necessary to ensure that the Preakness does not go the way of the Baltimore Colts in the wake of bankruptcy proceedings that began in Delaware last month for Magna, the owner of the Maryland racetracks. Hearings on the emergency bill were scheduled for Thursday.

"We are disappointed by the introduction of the legislation and the threat to our assets," Greg Rayburn, Magna's interim chief, said in a statement.

Brian S. Rosen, a New York bankruptcy attorney representing the company, sent O'Malley and legislative leaders a letter asking them to "cease and desist all activity" with respect to the bill "immediately."

Maryland officials meanwhile emphasized that the measure - which would authorize the state to acquire the Preakness, Pimlico Race Course, Laurel Park, and the Bowie Training Center by eminent domain - is to be employed only if necessary.

"This is a very bold step," said senate president Thomas V. Mike Miller. "The state is stepping in almost heavy-handed and saying, 'Look, we don't care how much money you've got or where you want to go with these properties. The state of Maryland has an interest.' "

Under the bill, the state could seize the tracks as well as the Woodlawn Vase and Preakness-related trademarks, copyrights, and contracts, if doing so prevents "the loss of the historically, culturally, and economically important" horse racing legacy.

Legal experts say the bankruptcy filing by Magna could prevent the state from exercising that power.