Colts Redux? Can the Preakness be Seized?

Many remember the ill-fated attempt in the mid-1980s by the city of Baltimore to utilize eminent domain to seize the Colts under a law passed by the Maryland Legislature. Colts' then-owner Robert Irsay moved the team in the dead of night to take a deal offered by Indianapolis. In an eerie echo of this, the Governor of Maryland is seeking legislature to seize the Preakness, the second jewel of horse racing's triple crown. An excellent blog by the Wall Street Journal's law blog outlines the difficulties of the case in detail and links to a number of newspaper articles giving background on this dispute.

The issue is not a relocation. Rather, it is the effect of a bankruptcy filing by the race's owner, Magna Entertainment Corp. and potential of a sale of its assets, including the race track and the intangible property of the race itself. Assuming that the legislation is passed and eminent domain is utilized, the question is what effect the action would have in the Chapter 11 filing in the bankruptcy court. That is a more complicated matter than the attempt to seize the Colts as pre-emption issues could be paramount (assuming that the seizure is constitutional).

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