The sale of Pimlico Race Course and Laurel Park will proceed without a lead bidder, prolonging questions about the future of Maryland's two thoroughbred tracks.

The announcement of a "stalking horse," or lead bid, this week was expected to provide insight into the starting price and potential new owner of the tracks and the Preakness, the second leg of horse racing's Triple Crown.

Now, it might not be until January when the fate of the tracks is revealed. The auction is scheduled for Jan. 8.

Bankrupt track operator Magna Entertainment Corp. will proceed to the second round of bidding after it could not agree on terms with an unidentified lead bidder for the Maryland tracks, said Michael Wildish, a managing director of New York investment bank Miller Buckfire, which is handling the sale for the racetrack owner.

"We were negotiating with a potential stalking horse, but we were not able to get terms that we felt were reasonable," Wildish said Thursday.

"It doesn't always have to relate to the value" of the tracks, Wildish added, noting there could be issues involving closing conditions, claims and the deal's structure.

A stalking-horse bid allows a bankrupt company to avoid low bids on assets because it sets the benchmark for the sale. Bankruptcy experts say debtors such as Magna ideally prefer a stalking-horse bid, unless the terms are not favorable to them. Sticking points could include price, terms and breakup fees, said Baltimore bankruptcy attorney Joel I. Sher.

Brian Rosen, a New York-based attorney representing Magna, said Thursday that potential buyers are not inclined to submit their highest offers in cases where there are multiple rounds for bids. Rosen said last week that Magna would only proceed with a stalking-horse bid "if we have someone worthy of it."

Magna was set to name a lead bidder on Monday but asked the federal bankruptcy court in Delaware for an extension until Wednesday because it was still negotiating a stalking-horse price with a potential purchaser. Several initial bids had come in, Rosen said.

The bankruptcy court has already approved the sale of Magna's three tracks in Oklahoma, Texas and Ohio. Each property had a stalking-horse bid to start the auction.

Asked whether the lack of a lead bid says anything about the demand for or desirability of the two tracks, Wildish said, "I think what we're seeing are tactical elements of the process more than fundamental interest."

Unlike the auctions for Magna's other tracks, the sale process for Pimlico and Laurel Park involves a unique variable: Any party submitting a bid must agree not to move the Preakness outside Maryland.

The state also can assert its "right of first refusal" for the Preakness, which gives it 60 days to review a deal and the right to match any bid.

Sher, the bankruptcy attorney, said the state's right of first refusal might deter bidders who fear spending time and money trying to win Magna's tracks only to be trumped by the government.

Gregory Cross, a Venable lawyer representing the state in the matter, disagreed.

"If you want to keep the Preakness in the state of Maryland, it should not be a deterrent," he said.

The second round of bids is due Dec. 4. There are discussions about possibly extending that deadline, but no decision has been made, Wildish said.

Since Magna filed for bankruptcy protection in March, several parties have emerged as potential bidders.

Pikesville shopping center developer Carl Verstandig said recently he has entered into an agreement with two unidentified bidders to buy the excess land surrounding Pimlico and Laurel Park for $38 million if either one emerges as the winner for the tracks. The winner also would acquire a 50 percent stake in mixed-use commercial centers Verstandig plans to develop around the tracks.

Meanwhile, Joseph De Francis, a former owner of the two tracks, has indicated that he may be interested in reacquiring the two tracks.

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