04/07/2009 11:00PM

Stronach steps down as Magna interim CEO

Email

Greg Rayburn, a senior managing director of the corporate-restructuring consulting company FTI Palladium, has been named interim chief executive officer of the bankrupt racetrack operator Magna Entertainment Corp., Magna announced late on Tuesday night.

Rayburn will replace Magna's founder and chairman, Frank Stronach, as chief executive. Stronach has been serving as Magna's interim chief executive since the middle of 2007, when its seventh chief executive officer since its founding in 1998 resigned. A release from Magna said that Stronach has "resigned his office as chief executive officer of the company effective immediately," but will remain chairman of the company's board.

Rayburn has served in a number of interim positions at companies going through bankruptcies or reorganizations, including WorldCom, Sunterra Corporation, Muzak Holdings, and Syntax-Brillian Corporation, according to a biography at FTI Palladium's website.

Magna filed for bankruptcy on March 5 and is seeking approval from the court to auction off its properties. However, one of those auction plans has been the source of widespread criticism because of Magna's plan to allow its parent company and largest creditor, MI Developments, to submit a stalking-horse bid for a bundle of Magna's racing properties.

Critics of the auction plan have said that Magna Entertainment is seeking to transfer the assets to MI Developments at a cut-rate price by devising rules favorable to MI Developments' bid. Like Magna Entertainment, MI Developments is controlled by Stronach, and he is remains the chairman of both companies.