Creditors Win Bid To Sue Magna Unit

Law360, New York (August 19, 2009, 6:47 PM EDT) -- The unsecured creditors in the Magna Entertainment Corp. bankruptcy have won court approval to go after majority shareholder MID Islandi, which allegedly improperly failed to sell the racetrack operator's marketable assets and handed out unnecessary loans as the company collapsed.

Judge Mary F. Walrath granted a motion of the official committee of unsecured creditors to pursue claims against the company and chairman Frank Stronach in a hearing Tuesday in the U.S. Bankruptcy Court for the District of Delaware.

The committee has submitted a proposed order to...
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