Filed by Bowne Pure Compliance

0001362310-08-004854.txt : 20080826 0001362310-08-004854.hdr.sgml : 20080826 20080826090040 ACCESSION NUMBER: 0001362310-08-004854 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20080826 DATE AS OF CHANGE: 20080826 GROUP MEMBERS: DAVID EINHORN GROUP MEMBERS: GREENLIGHT CAPITAL, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MI DEVELOPMENTS INC CENTRAL INDEX KEY: 0001252509 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-79210 FILM NUMBER: 081037935 BUSINESS ADDRESS: STREET 1: 455 MAGNA DR STREET 2: AURORA ONTARIO CITY: CANADA STATE: A6 ZIP: L4G7A9 BUSINESS PHONE: 9057136322 MAIL ADDRESS: STREET 1: 455 MAGNA DR STREET 2: AURORA ONTARIO CITY: CANADA STATE: A6 ZIP: L4G7A9 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GREENLIGHT CAPITAL LLC CENTRAL INDEX KEY: 0001040272 IRS NUMBER: 133886851 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 140 EAST 45TH STREET STREET 2: 24TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2129731900 MAIL ADDRESS: STREET 1: 140 EAST 45TH STREET STREET 2: 24TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D/A 1 c74776sc13dza.htm SCHEDULE 13D/A Filed by Bowne Pure Compliance


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934
(Amendment No. 10 )*

MI DEVELOPMENTS INC.

(Name of Issuer)

Class A Subordinate Voting Shares, no par value

(Title of Class of Securities)

55304X104

(CUSIP Number)

Greenlight Capital, L.L.C.
140 East 45th Street, Floor 24
New York, New York 10017
Tel. No.: (212) 973-1900
Attention: Chief Operating Officer

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

- with copies to -

Eliot D. Raffkind
Akin Gump Strauss Hauer & Feld LLP
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201-4618
(214) 969-2800

August 25, 2008

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No.		55304X104


1	NAMES OF REPORTING PERSONS Greenlight Capital, L.L.C.


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS (SEE INSTRUCTIONS)

	AF

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware

		7	SOLE VOTING POWER

NUMBER OF			2,234,000

SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			0

EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			2,234,000

WITH		10	SHARED DISPOSITIVE POWER

			0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	2,234,000

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	4.8%

14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

	OO


CUSIP No.		55304X104


1	NAMES OF REPORTING PERSONS Greenlight Capital, Inc.


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS (SEE INSTRUCTIONS)

	AF

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware

		7	SOLE VOTING POWER

NUMBER OF			2,466,000

SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			0

EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			2,466,000

WITH		10	SHARED DISPOSITIVE POWER

			0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	2,466,000

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	5.3%

14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

	CO


CUSIP No.		55304X104


1	NAMES OF REPORTING PERSONS David Einhorn


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS (SEE INSTRUCTIONS)

	AF

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	United States Citizen

		7	SOLE VOTING POWER

NUMBER OF			5,036,335

SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			0

EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			5,036,335

WITH		10	SHARED DISPOSITIVE POWER

			0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	5,036,335

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	10.9%

14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

	IN

AMENDMENT NO. 10 TO SCHEDULE 13D

This Amendment No. 10 to Schedule 13D (the “Amendment”) is being filed on behalf of Greenlight Capital, L.L.C., a Delaware limited liability company (“Greenlight LLC”), Greenlight Capital, Inc., a Delaware corporation (“Greenlight Inc.” and together with Greenlight LLC, “Greenlight”), and Mr. David Einhorn, the principal of each of Greenlight LLC and Greenlight Inc. Greenlight and Mr. Einhorn are referred to herein as the “Reporting Persons.” This Amendment modifies the original Schedule 13D filed with the Securities and Exchange Commission on August 11, 2004, as amended by Amendment No. 1 filed on September 2, 2004, Amendment No. 2 filed on January 18, 2005, Amendment No. 3 filed on April 8, 2005, Amendment No. 4 filed on April 15, 2005, Amendment No. 5 filed on August 2, 2005, Amendment No. 6 filed on October 18, 2005, Amendment No. 7 filed on December 1, 2006, Amendment No. 8 filed on March 7, 2008 and Amendment No. 9 filed on April 24, 2008.

This Amendment relates to Class A Subordinated Voting Shares, no par value (the “Class A Shares”), of MI Developments Inc., a Canadian company (“MID” or the “Issuer”), owned by (A) Greenlight LLC for the account of Greenlight Capital, L.P., of which Greenlight LLC is the general partner and Greenlight Capital Qualified, L.P., of which Greenlight LLC is the general partner, and (B) the Class A Shares purchased by Greenlight Inc. for the account of Greenlight Capital Offshore, Ltd., for which Greenlight Inc. is the investment advisor. This Amendment also relates to the Class A Shares purchased by affiliates of Greenlight for the accounts of (i) Greenlight Masters, LP, (ii) Greenlight Masters Qualified, LP, (iii) Greenlight Masters Offshore, Ltd., (iv) Greenlight Masters Offshore I, Ltd., (v) Greenlight Masters Offshore Partners, L.P. and (vi) a managed account for which an affiliate of Greenlight acts as investment manager (the “Managed Account” and collectively, the “Affiliates”). Mr. Einhorn is the principal of each of the Affiliates.

Item 4. Purpose of the Transaction

Item 4 of the Schedule 13D is hereby amended by adding the following:

On August 25, 2008, the Reporting Persons submitted a letter to the Board of Directors of MI Developments Inc. regarding the company’s investment in Magna Entertainment Corp. A copy of the letter is attached hereto as Exhibit 14.

Item 5. Interest in Securities of the Issuer

Item 5 of the Schedule 13D is hereby amended and restated in its entirety as follows:

(a) Greenlight LLC is the beneficial owner of 2,234,000 Class A Shares. Greenlight Inc. is the beneficial owner of 2,466,000 Class A Shares. Mr. Einhorn, as the principal of Greenlight and the Affiliates is the beneficial owner of 5,036,335 Class A Shares.

Greenlight LLC is the beneficial owner of 4.8% of the outstanding Class A Shares. Greenlight Inc. is the beneficial owner of 5.3% of the outstanding Class A Shares. Mr. Einhorn is the beneficial owner of 10.9% of the outstanding Class A Shares. These percentages were determined by dividing the number of Class A Shares beneficially owned by each of the reporting persons by 46,160,564, the number of Class A Shares outstanding as of June 30, 2008, as reported in the Issuer’s Second Quarter Report 2008, filed as an exhibit to Form 6-K on August 8, 2008.

(b) Greenlight LLC has the sole power to vote and dispose of 2,234,000 Class A Shares beneficially owned by it. Greenlight Inc. has the sole power to vote and dispose of 2,466,000 Class A Shares beneficially owned by it. As the principal of Greenlight and the Affiliates, Mr. Einhorn may direct the vote and disposition of 5,036,335 Class A Shares beneficially owned by Greenlight and the Affiliates.

The filing of this Schedule 13D shall not be construed as an admission that any of the Reporting Persons is for the purposes of Section 13(d) or 13(g) of the Securities Exchange Act of 1934, the beneficial owner of any of the 5,036,335 Class A Shares reported herein. Pursuant to Rule 13d-4, each of the Reporting Persons disclaims such beneficial ownership.

(c) The transactions in the Issuer’s securities by the Reporting Persons in the last sixty days are listed as Annex A attached hereto and made a part hereof.

(d) Not Applicable.

(e) Not Applicable.

Item 7. Material to be Filed as Exhibits

Item 7 is hereby amended by adding the following exhibit:

Exhibit 14 Letter submitted to MID on August 25, 2008.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.


Dated: August 26, 2008
	GREENLIGHT CAPITAL, L.L.C.
	By:	/s/ DANIEL ROITMAN
		Name:	Daniel Roitman
		Title:	Chief Operating Officer

	GREENLIGHT CAPITAL, INC.
	By:	/s/ DANIEL ROITMAN
		Name:	Daniel Roitman
		Title:	Chief Operating Officer

	/s/ DANIEL ROITMAN
	Daniel Roitman, on behalf of David Einhorn

The Power of Attorney, executed by David Einhorn authorizing Harry Brandler and Daniel Roitman to sign and file this Schedule 13D/A on David Einhorn’s behalf, which was filed with the Schedule 13G filed with the Securities and Exchange Commission on July 18, 2005, by the Reporting Persons with respect to the Ordinary Shares of Flamel Technologies S.A. is hereby incorporated by reference.

ANNEX A


	Transaction	Number of Class A Shares	Price per
Account	Date	Purchased (P)	Share ($)
Managed Account	7/30/2008	4,300	$19.5830
Managed Account	7/30/2008	16,700	$19.6000
Managed Account	7/31/2008	9,500	$19.8192
Managed Account	8/1/2008	5,800	$19.5938
Managed Account	8/4/2008	4,698	$19.4774
Managed Account	8/5/2008	6,500	$19.8206
Managed Account	8/6/2008	8,800	$19.8072
Managed Account	8/7/2008	5,037	$19.7764

EX-14 2 c74776exv14.htm EXHIBIT 14 Filed by Bowne Pure Compliance

Exhibit 14

Letter to MID

[Letterhead of Greenlight]

August 25, 2008

The Board of Directors
MI Developments Inc.
455 Magna Drive
Aurora, ON L4G 7A9

Magna Entertainment Corp.

Dear Sirs:

We are writing to express our concern about MI Developments’ (“MID”) investment in Magna Entertainment Corp. (“MEC”). Given the dire situation at MEC, the MID Board needs to take the necessary actions to enforce or preserve the value of MID’s $267 million senior debt investment in MEC and not compound the risk to MID by continuing to fund MEC or extending the maturity of existing debt.

It is clear that MEC is in serious financial trouble. According to the MEC press release issued on August 5, 2008, “... the Company has needed and will again need to seek extensions from existing lenders and additional funds in the short-term from one or more possible sources.” MEC’s stock price has fallen over 90% since MID’s Board of Directors claimed in 2005 that it was adopting its own recommendation to direct management to maximize the return on MID’s current and future investments in MEC by examining the funding necessary for MEC’s strategic plan, stabilizing MEC’s capital structure, and assessing all reasonable financing alternatives for MEC. At that time MID’s Board determined that MEC was poised for growth and Frank Stronach expressed a vision that MEC would become the most profitable company in the world.

While we disagreed at the time with the Board’s assessment of MEC’s prospects, MID asserted that this was simply a question about short-term versus long-term value creation and that reasonable people could disagree.

Since Magna spun-off MEC over eight years ago, there has been a favorable environment for the U.S. consumer, and the gaming industry has experienced significant growth. MEC failed to create any value during that favorable part of the cycle. Instead, it has been a case-study in mismanagement and poor resource allocation. Its prospects were dim even before the cycle turned against the U.S. consumer and the gaming industry.

MEC’s situation and prospects are no longer matters on which reasonable people can disagree. The facts are obvious and beyond dispute: MEC has utterly failed as a business enterprise. More money, time and resources will not resuscitate it under Mr. Stronach’s leadership or anyone else he appoints to pursue his so-called vision. After many years of failure, MEC still has no viable business plan.

MEC’s plan to eliminate its debt by December 31, 2008 has also failed. On MEC’s conference call on August 6, 2008 (the “MEC Call”), Mr. Stronach stated “...we do not expect to achieve our previously announced targets of eliminating our debt by December 31, 2008.” In addition, MEC’s 10-Q for the quarter ended June 30, 2008 (the “MEC 10-Q”) states that “...we do not expect to execute the Plan on the originally contemplated schedule, if at all.” (emphasis added). Even MEC’s convertible subordinated bonds that mature shortly are now trading at only fifty cents on the dollar.

The MEC debt reduction plan has been such a dismal failure that according to the MID press release issued on August 8, 2008 (the “MID Release”), MEC’s net debt has actually increased by $21.6 million, from $564.5 million to $586.1 million, during the period from December 31, 2007 to June 30, 2008 when debt reduction was supposed to be MEC’s main priority.

MID’s equity investment in MEC is clearly no longer a strategic investment. Yet in the face of the rapidly deteriorating situation at MEC, the MID Board has continued to extend the maturity of the senior debt owed to it by MEC.

In light of MEC’s financial situation, we would have expected MID to see that MEC took aggressive steps to reduce its debt, or otherwise attempt to stabilize its financial situation. Instead, the MEC 10-Q threatens the abandonment of its plan to sell assets to reduce debt by stating “...given the announcement of the MID reorganization proposal, and pending determination of whether it will proceed, we are in the process of reconsidering whether to sell certain assets that were originally identified for disposition under the Plan.” Mr. Stronach made a similar statement during the MEC Call.

On the MEC Call, in an ominous and thinly veiled threat to the public MID shareholders, Mr. Stronach said “...I have some — call it some chips in my hand which the MID shareholders would like to have. And I have no problems releasing those chips or giving up those chips, providing it’s a fair thing for MEC.”

A reasonable interpretation of this statement in light of Mr. Stronach’s MID reorganization proposal is that Mr. Stronach intends to hold MID hostage until MEC is fully funded and Mr. Stronach has received a very large personal pay-off at the expense of the MID shareholders.

To that end, among other things Mr. Stronach has overseen (1) MID’s failure to implement any of its own 2005 Board approved resolutions; (2) the inexplicable “destruction” of MID’s relationship with its largest customer (Magna) which Mr. Stronach also controls; (3) MID dramatically increasing its exposure to the deteriorating investment in MEC through project financings and bridge loans on which MEC has been unable to perform; and (4) MID and MEC’s repeated failures to implement any recognizable business plan.

MID shareholders have been threatened that if they don’t capitulate to Mr. Stronach’s demands, MID will continue to fail to take any action to create shareholder value and, in fact, will destroy additional value through unlimited support of MEC, including perhaps buying the company. Undoubtedly this is why a majority of them were intimidated enough to support a reorganization proposal that otherwise made no sense.

-2-

We at Greenlight will remain vigilant in our efforts to protect ourselves and our fellow minority shareholders from what we believe to be oppressive treatment. We have never before witnessed such overt aggression by a business leader against a company he controls.

Despite Mr. Stronach’s actions and intentions, each and every member of the MID Board of Directors has a fiduciary duty to all of the shareholders of MID, not just to Mr. Stronach, and the Board must explore all of MID’s alternatives with respect to MEC, not just the ones that Mr. Stronach wants. It may be that Mr. Stronach can vote his shares on matters subject to shareholder vote as he wishes. However, there are many protective actions MID’s Board can take that do not require a shareholder vote and would mitigate the harm that Mr. Stronach is trying to inflict on the company.

MID’s Board must stop expending any more funds to prop up the value of the MEC equity, should not bail-out MEC’s subordinated bondholders and should stop coercing (including by failing to take affirmative action to protect shareholders) the MID shareholders into approving Mr. Stronach’s terms. MID’s Board is duty bound to resist Mr. Stronach’s efforts to use MID’s money in this regard.

Given that MEC’s equity is no longer a strategic investment for MID, rather than blindly continuing to extend the maturity of the senior debt, MID should act like an independent third-party lender and explore all of its options with respect to MEC. There are several possible options MID’s Board can implement that would not require Mr. Stronach’s personal support, including foreclosing on the senior debt or marketing its MEC debt position for sale to a third party. MID’s Board of Directors has a fiduciary duty to protect the shareholders of MID, not to focus as Mr. Stronach says on what’s a “fair thing for MEC.”

By continuing to extend the senior debt, rather than exploring all of their options, the MID Board is endangering MID’s senior debt investment in MEC and is making repayment of the debt in full less likely with each passing day.

If MEC fails to repay its debt to MID in full, the members of the MID Board will be held accountable for failing to fulfill their fiduciary duty to the MID shareholders. We minority shareholders are looking to you to protect our interests from Mr. Stronach’s continued irresponsible, uneconomic and self-serving support of MEC.

Mr. Stronach said during the MEC Call, “I wouldn’t throw money in an empty hole.” Why has so much of MID’s money met exactly that fate?


	Yours very truly,
	/s/ David Einhorn

	David Einhorn President Greenlight Capital, Inc.

-3-