MI Developments shareholder opposes reorganization plan

By Lisa Kerner

Charlotte, N.C., Feb. 10 - A group of MI Developments Inc. shareholders led by Greenlight Capital, Inc. plan to vote against the company's proposed reorganization plan suggested by controlling shareholder Frank Stronach.

Greenlight made its comments in a Feb. 9 letter included as part of a schedule 13D/A filed with the Securities and Exchange Commission.

MI Developments' plan includes lending additional funds for Magna Entertainment Corp.'s slot license in Maryland, Greenlight said.

According to Greenlight, during its six years as an MI Developments shareholder, Greenlight has watched "Frank Stronach continue to fund his interests in horses and gambling" through MI Developments.

"The majority of shareholders of MI Developments do not support the use of MI Developments' valuable cash flows to fund Magna Entertainment Corp. The plan is just one more egregious attempt to further erode MI Developments' value," Greenlight said in the letter.

Greenlight asked the MI Developments board once again to consider a proposal made by Halsey Minor in October to acquire the Magna Entertainment loans.

"There is little doubt that selling the Magna Entertainment loans to Mr. Minor would be a far better outcome for MI Developments shareholders than the current proposal, and it would not require approval from Mr. Stronach or a shareholder vote," Greenlight said.

It was previously reported that on Oct. 15 Greenlight said MI Developments ignored Minor's proposal and elected to extend the maturity of the bridge loan to Magna Entertainment until Dec. 1 and extend an additional $19.5 million of financing under the bridge loan.

"Rather than burn more MI Developments resources pursuing the plan, the MI Developments board should start considering the interests of all of the MI Developments shareholders rather than just Mr. Stronach," Greenlight said.

MI Developments is an Aurora, Ont.-based real estate operating company engaged in the ownership, development, management, leasing and acquisition of industrial and commercial real estate properties located in North America and Europe.

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