The stock price of Magna Entertainment Corp. plummeted 25.5 percent on Thursday to an all-time low after its parent company announced that it had abandoned a plan to spin off the racing company and would force Magna to pay off its debts by mid-March.\nMagna's stock settled at 38 cents by the end of trading Thursday, 12 cents below its previous all-time low. When adjusted for a 1-for-20 reverse stock split in 2008, the stock is now trading at 1.9 cents a share.\nMagna's parent, MI Developments, announced that it had canceled the spin-off plan because of "current global economic conditions, the continued disruptions in financial markets, and ongoing uncertainty in the automotive industry." MI Developments is a property-holding company that also holds the leases to car-part plants owned by Magna International, which was founded by Magna Entertainment chairman Frank Stronach.\nThe cancellation of the spin-off plan suggests that Magna Entertainment is one step closer to bankruptcy reorganization. If Magna files for bankruptcy, the company will likely continue to operate its racetracks under the protection of the court, but could face a forced sale of several of its properties as a means of paying off creditors.\nThe spin-off plan, announced last November, would have resulted in the sale of all the Magna stock held by MI Developments to a company controlled by Stronach. Under the plan, Magna was required to sell all of its non-racing real estate to retire portions of a $170 million debt Magna owes to MID. Several large investors in MID, including Greenlight Capital, were opposed to the spin-off plan.\nUnder the spin-off plan, the due dates for the Magna debt held by MID would have been pushed back to late 2009. Now, $45 million of the debt will come due March 13, and $126 million of the debt will be due March 20. Magna Entertainment has virtually no options left to pay off the debt, and if the company defaults on any of those loans, all of its other loans will go into default under clauses in the debt agreements.\nMagna owns Santa Anita Park and Golden Gate Fields in California, Gulfstream Park in Florida, Laurel Park and Pimlico Race Course in Maryland, Remington Park in Oklahoma, Thistledown in Ohio, and Portland Meadows in Oregon. It also owns the racing assets of Lone Star Park, the account-wagering company XpressBet, and the bet-processing company AmTote. In addition, Magna owns a 50 percent share in HorseRacing TV and the simulcast-marketing company TrackNet. Churchill Downs owns the other half of HRTV and TrackNet.\nLate last year, Magna hired a company specializing in bankruptcy reorganizations as an adviser. According to two racing officials, Magna has also recently hired Weil, Gotshal, and Manges, a New York law firm that represented the New York Racing Association in its recent bankruptcy reorganization. Representatives of the firm did not return a phone call Thursday.\nMagna's most recent balance sheet lists $265 million in accounts payable, $71.9 million in short-term debt, $379.3 million in long-term debt, and $112 million in "other liabilities." It has lost $500 million over the past five years, and efforts by the company to raise money by selling tracks and structuring partnerships in its marquee tracks have failed.\nMagna officials did not return phone calls Thursday.