MI Developments Inc. ("MID") (TSX: MIM.A, MIM.B; NYSE: MIM) today announced that it, its subsidiary MID Islandi sf. (the "MID Lender") and Magna Entertainment Corp. ("MEC") have agreed in principle to the terms of a settlement

and release with the Official Committee of Unsecured Creditors (the "Committee") in connection with an action (the "Action") commenced by the Committee with respect to the bankruptcy proceedings of MEC under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the "MEC Chapter 11 Proceeding"). MID announced the commencement of the Action on July 22, 2009.

Under the terms of the settlement agreement, in exchange for the dismissal of the Action with prejudice and a full release of MID, the MID Lender, their affiliates, and all current and former officers and directors of MID and MEC and their respective affiliates, the unsecured creditors of MEC will receive US$75 million in cash plus US$1.5 million as a reimbursement for certain expenses in connection with the Action.

In addition, the parties have agreed to the following with respect to certain previously announced pending asset sales of MEC: (i) upon the sale of Thistledown, MID will receive the first US$20 million of the proceeds from such sale and the unsecured creditors of MEC will receive any proceeds in excess of such amount; (ii) upon the sale of Maryland Jockey Club ("MJC"), MID will receive the first US$20 million of the proceeds from such sale (subject to satisfying the secured claim of PNC Bank and all allowed trade claims directly against MJC and its subsidiaries) and MID and the unsecured creditors of MEC will share any proceeds in excess of such amount on a 50/50 basis; and (iii) upon the sale of Lone Star Park pursuant to an agreement previously filed in the Bankruptcy Court, the unsecured creditors of MEC will receive the first US$20 million of the proceeds from such sale and MID will receive any proceeds in excess of such amount. MID will also have the right to receive the assets or proceeds from the sale of Portland Meadows.

MID, MEC and the Committee have agreed to support a Plan of Reorganization in connection with the MEC Chapter 11 Proceeding which will provide for the remaining assets of MEC to be transferred to MID, including, among other assets, Santa Anita Park, Golden Gate Fields, Gulfstream Park (including MEC's interest in The Village at Gulfstream Park, a joint venture between MEC and Forest City Enterprises, Inc.), AmTote International, Inc. and XpressBet, Inc.

All rights of MID and MEC against MEC's directors & officers insurers will be preserved with regard to the settlement in order to seek appropriate compensation for the releases of all current and former officers and directors of MID and MEC and their respective affiliates. MID will be entitled to receive any such compensation from MEC's directors & officers insurers.

The settlement agreement is conditional upon the negotiation of definitive documents and the confirmation of the Plan of Reorganization in the MEC Chapter 11 Proceeding.

With respect to the non-real estate related MEC assets that will be transferred to MID as contemplated by the settlement agreement, MID intends to later announce certain forbearance terms or funding limitations or other restrictions to be approved by its Special Committee of the Board with respect to any future investments by MID in, or loans to be made by MID in respect of, such assets.

The terms of the settlement were agreed to by the Board of Directors of MID based upon a favourable recommendation from its Special Committee of the Board.

(MI Developments Inc.)

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