Creditors' Claims Over Bankrupt Racetrack Survive

Law360, New York (September 22, 2009, 8:05 PM EDT) -- A judge reportedly has refused to dismiss a lawsuit filed by Magna Entertainment Corp.'s unsecured creditors against majority shareholder MID Islandi for allegedly failing to sell the racetrack operator's marketable assets and handing out unnecessary loans as the company collapsed.

The U.S. Bankruptcy Court for the District of Delaware allowed the case, filed by the official committee of unsecured creditors July 21, to continue after a Tuesday hearing on MID's motion to dismiss, the Associated Press reported.

In their adversary proceeding the unsecured creditors claim that...
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