Posts Tagged ‘william gallion’
Monday, December 1st, 2008
A Franklin County, Kentucky, Circuit Court judge has ruled against a proposed sale of a 20% interest in Horse of the Year Curlin to majority owner Jess Jackson for $4 million. The ruling by Judge Roger Crittenden came in a hearing on Monday involving the 20% owned by disbarred attorneys Shirley Cunningham and William Gallion, who have been hit with a $42-million judgment in a civil lawsuit involving the fees they charged clients in a class-action lawsuit against the manufacturer of a diet drug. Cunningham and Gallion also face criminal charges stemming from the case. The ruling against the sale was not based on the judge’s disapproval of the $4-million appraisal on the 20% interest, but because two parties objected to the sale: Gallion and Cunningham’s attorney, Andre Regard; and the attorney for the class-action plaintiffs, Angela Ford. The judge’s decision effectively ends a lengthy legal battle involving Jackson’s Stonestreet Farm’s and Cunningham and Gallion’s Midnight Cry Stable (also doing business as Tandy LLC). Midnight Cry originally owned 100% in Curlin and sold Jackson and two other partners an 80% interest after the son of Smart Strike broke his maiden early in 2007. Jackson eventually bought out the other two partners, Satish Sanan and George Bolton. Regard said his clients were looking forward to being partners in Curlin as he enters his new career at stud at Lane’s End Farm in Versailles, Ky., where he will stand for a first-year stud fee of $75,000, payable when the foal stands and nurses. "He’s going to be a very popular horse," Regard said.
The objections of attorneys Regard and Ford were based on the appraisal provided in court by bloodstock consultant Ric Waldman, who testified in November that the current weakened market conditions placed Curlin’s overall value at $20 million as a stallion prospect. A court-ordered receiver arranged for a sealed-bid sale of the 20% through the Keeneland auction company in early November, but when there were no bids, Jackson offered to buy the interest for $4 million. Ford said the receiver had numerous conversations with Stonestreet representatives about the sale but never consulted with her as representative of the plaintiffs. "I think the evaluation is extremely low and I think it’s something we have to contest," she told Crittenden. Richard Getty, attorney for Jackson, told the court that a "bird in the hand — $4 million, which is a million and a half dollars more than I think it’s worth — is better than a bird in the bush. The current market conditions are horrible. … If they are not smart enough to figure out this is a very good deal, given the market conditions, I feel sorry for them. … A year and a half or two years from now this interest may not be worth $4 million." Regard said the court had been told repeatedly by Jackson’s attorney that no stallion farm would stand Curlin as long as Gallion and Cunningham were minority owners. "Lane’s End is the premier stallion farm in the world," Regard said. "Lane’s End was Tandy’s first choice last year, but disagreements between Mr. Jackson and Mr. Farish concerning some other issues in the industry prevented that. … Entering into a contract (with Lane’s End) proves that there were no legal issues related to Tandy’s ownership in Curlin that would prevent him from going to stud. Lane’s End saw no obstacle to standing the horse." Getty said after the ruling he was not aware of any "disagreements" between Jackson and Farish, and also said he was not aware that Jackson was prepared to make any further offers to Gallion and Cunningham for their interest in the horse. Getty pointed out to Crittenden that Lane’s End is receiving a management fee to stand Curlin and that Gallion and Cunningham would be liable for $1 million in expenses between now and April 2010 for management of the horse, insurance premiums and advertising/marketing costs. "Who’s going to pay the $1 million," he asked the judge. He also cited the fact some top race horses, including two-time Horse of the Year Cigar, can be infertile as stallions. "If they want to run the risk of intertility, we can’t help them," Getty said.
Regard responded that Lane’s End’s will be compensated after stud fees are paid. "The largest part of those expenses are going to be paid upon the receipt of the stud fee income," Regard said.
In the end, Crittenden sustained the objections of Ford and Regard to not go forward with the sale of the 20% in Curlin. "If both parties object, then this court does not intend to rule that the receiver accept the offer," Crittenden said. He ruled that the court-ordered receiver will wrap up its role, but be available in the event of any further offers. Copyright © 2008, The Paulick Report Visit the Paulick Report for all the latest news throughout the racing world. Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick
Tags: andre regard, Curlin, horse of the year, jess jackson, Lane's End, midnight cry, Paulick Report, Ray Paulick, Ric Waldman, richard getty, roger crittenden, shirley cunningham, stonestreet stables, tandy llc, thoroughbred stallions, william gallion, William S. Farish
Posted in Breeding, Curlin | 11 Comments »
Monday, November 24th, 2008
By Ray Paulick
The retirement of reigning Horse of the Year Curlin to Lane’s End Farm may be one of the more unusual stallion contracts with which the Versailles, Ky., farm’s owner, William S. Farish, has been involved. Farish said as much in an interview with the Paulick Report, although he would not go into details of the deal that was announced on Nov. 21.
Farish confirmed that Lane’s End did not purchase any interest in the Smart Strike 4-year-old colt, who will stand for $75,000 live foal as the property of Jess Jackson and the Midnight Cry Stable – at least until Midnight Cry’s 20% ownership interest is resolved in a legal battle that goes back to a 2001 diet-drug class-action settlement. The case revolved around the legal fees charged by plaintiff attorneys William Gallion and Shirley Cunningham, among others. The two men, who raced under the Midnight Cry stable and bought Curlin as a yearling for $57,000 in 2005, lost a $42 million judgment in a civil suit and face retrial on criminal charges of mail fraud after a previous trial ended in a hung jury. A third defendant was acquitted.
A court-ordered receiver has been charged with selling Midnight Cry’s 20% interest in Curlin, but the fair market value of the horse is in dispute. At a recent hearing, bloodstock consultant Ric Waldman estimated Curlin’s total value at $20 million, meaning Midnight Cry’s interest is worth $4 million – the amount Jackson and his wife, Barbara Banke, offered to buy it. Andre Regard, an attorney for Midnight Cry, said the figure is too low.
Because of the legal complications, it’s believed Jackson was unable to convey any breeding rights to Lane’s End, a standard part of most stallion contracts that gives the farm standing a horse a minimum of four to six annual breeding rights. In lieu of those rights, the assumption is that Jackson is paying Lane’s End an annual management fee, in addition to standard marketing and board fees. Unless the management fees are linked to Curlin’s stud fee (i.e., they increase if his stud fee increases), Lane’s End will not enjoy the potential upside it would if the farm owned shares or a percentage of the horse, or if the farm received a specific number of annual breeding rights.
Regard said he has requested a copy of the stallion contract from Jackson but has yet to receive it. He suggested the details of the contract could help establish Curlin’s true value. Regard contends that the $20-million appraised value is too low, based on the multiple of 267 times the initial $75,000 stud fee. Some stallions are valued based on a multiple of 400 (or even as high as 500) times the initial stud fee, Regard said.
Farish admitted the negotiations over Curlin were “difficult” because of the legal challenges. That Jackson and Farish ended up business partners on the horse is viewed by some as ironic, in light of Jackson’s crusade to reform the Thoroughbred auction business and his push to have bloodstock agents licensed. It is widely believed the politically-connected Farish used his clout in Kentucky’s legislative circles to restrict reforms and block the mandated licensing of agents.
Curlin was retired following his fourth-place finish in the Breeders’ Cup Classic, the only time in 16 career starts he finished worse than third. North America’s all-time leading earner, with $10,501,800 won in the United States and Dubai, will make a final public appearance this Saturday at Churchill Downs before joining his sire, Smart Strike, at Lane’s End.
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Tags: andre regard, annual breeding rights, barbara banke, Curlin, fen-phen, jess jackson, Lane's End, midnight cry stable, Ric Waldman, shirley cunningham, smart strike, thoroughbred auction reform, Thoroughbred breeding, thoroughbred stallions, Will Farish, william gallion, William S. Farish
Posted in Breeding, Curlin, Stallions | 1 Comment »
Wednesday, November 19th, 2008
By Ray Paulick
Lane’s End Farm is expected to announce that reigning Horse of the Year Curlin will enter stud at the Versailles, Ky., farm in 2009 for a live foal stud fee of $75,000, the Paulick Report has learned. Lane’s End is owned by William S. Farish, vice chairman of the Jockey Club and former ambassador to Great Britain for President George W. Bush.
Jess Jackson owns 80% of the son of Smart Strike—Sherriffs Deputy, by Deputy Minister, with the other 20% owned by the Midnight Cry Stable of disbarred attorneys Shirley Cunningham and William Gallion. That share has been the focus of a complicated legal battle resulting from a $42-million judgment against Cunningham and Gallion in a civil case. The two also face criminal charges.
Jackson and wife Barbara Banke have offered to buy Midnight Cry’s 20% for $4 million, based on an appraisal by bloodstock expert Ric Waldman that set a $20-million fair market value on Curlin. While Curlin may have been insured for an amount in excess of $40 million, Waldman’s appraisal took into account the current global economic crisis and recent trends in the bloodstock market. The just-concluded November breeding stock sale at Keeneland resulted in a 46% decline in gross revenues.
Jackson announced Nov. 15 that Curlin would enter stud in Kentucky in 2009, though he did not name a farm. At the time, he said various offers were being considered, and also indicated Curlin could become the first stallion to stand at the Stonestreet Farms in Lexington that he owns. The late-season announcement, made after matings for many broodmares already have been planned, may also have contributed to Waldman’s appraisal, which Andre Regard, an attorney for Gallion and Cunningham, said was below the horse’s true value.
No decision is expected on the Midnight Cry share of Curlin prior to a Dec. 1 court date in Franklin County, Ky. If a judge rules that the share should be sold to Jackson for $4 million, an appeal could extend the legal battle well into 2009.
It is believed Gainesway Farm was a “finalist” in the bidding for Curlin’s stud services. Jackson owns a large share of dual 2005 Classic winner Afleet Alex, who stands at Gainesway, owned by South African Graham Beck and run by his son, Antony. Jackson and the Beck family are both involved in the wine business, Jackson in California as the owner of Kendall-Jackson vineyards and the Becks primarily in South Africa. Jackson sells many of his horses through Gainesway and Taylor Made Sales Agency, which is also believed to have been a finalist to stand Curlin. Jackson also is part owner of 2004 Horse of the Year Ghostzapper, who stands at Adena Springs. It isn’t known whether Adena Springs, owned by Frank Stronach, actively recruited Curlin.
With a fee of $75,000, Curlin would be the highest-priced first-year stallion entering stud in Kentucky in 2009. Kentucky Derby and Preakness winner Big Brown will stand at Three Chimneys Farm for $65,000, the same amount as Coolmore/Ashford’s multiple European Group 1 winner Henrythenavigator, who finished second to Raven’s Pass in the Breeders’ Cup Classic in which Curlin was fourth.
“Curlin has proven himself across two continents with 16 starts, the honor of 2007 Horse of the Year and the greatest North American money-earner in racing history,” Jackson said in the Nov. 15 announcement that Curlin would enter stud in 2009. “He always gave it his all and has done everything we have asked of him. I am proud to announce that he will start a new career in 2009 and contribute his soundness, stamina, durability and athleticism to the breed. I am looking forward to seeing his foals compete and possibly exceed his unequaled racing record.”
At the time of the announcement, Jackson said he would consider one more race in 2008 for Curlin if “an appropriate venue and purse are offered.” Curlin has been ruled out of the Clark Handicap at Churchill and Cigar Mile at Aqueduct, the two most likely races for him, so it’s extremely doubtful he will run again.
Curlin, who began his career under the care of Helen Pitts and was transferred to trainer Steve Asmussen after breaking his maiden at Gulfstream Park early in 2007, retires with record earnings of $10,501,800. He won 11 of 16 starts, with two seconds and two thirds. He won seven Grade 1 races: the Breeders’ Cup Classic, Dubai World Cup, consecutive runnings of the Jockey Club Gold Cup, Woodward, Preakness and Stephen Foster Handicap. Bred in Kentucky by Fares Farm, he sold for $57,000 at the Keeneland September yearling sale. Jackson, Satish Sanan and George Bolton bought at 80% interest in Curlin through bloodstock agent John Moynihan for about $3 million after the colt’s maiden win. Jackson eventually bought Sanan and Bolton’s interests.
Curlin’s sire, Smart Strike, stands at Lane’s End for $150,000. Also joining the 2009 roster at Lane’s End is War Pass, the 2007 2-year-old male champion and winner of the Breeders’ Cup Juvenile who will stand for $30,000 live foal.
Kevin McGee, legal counsel for Jackson’s Kendall-Jackson Vineyards in California, would neither confirm nor deny that a deal with Lane’s End was imminent. Attempts to reach Will Farish were unsuccessful. Bill Farish, son of the Lane’s End owner, said he could not comment on the matter.
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Tags: adena springs, afleet alex, andre regard, ashford, barbara banke, Big Brown, Bill Farish, cigar mile, clark handicap, coolmore, coolmore/ashford, Curlin, dubai world cup, fares farm, Frank Stronach, gainesway, gainesway farm, george bolton, ghostzapper, helen pitts, henrythenavigator, horse of the year, horse of the year curlin, Horse Racing, jess jackson, jockey club gold cup, john moynihan, Keeneland, keeneland november breeding stock sale, kevin mcgee, Lane's End, midnight cry stable, Paulick Report, Ray Paulick, Ric Waldman, satish sanan, shirley cunningham, smart strike, steve asmussen, stonestreet farms, taylor made farm, taylor made sales agency, Thoroughbred industry, thoroughbred stallions, war pass, Will Farish, william gallion, William S. Farish
Posted in Breeding, Curlin, Horse Racing, Racing Greats, Stallions | 10 Comments »
Sunday, November 16th, 2008
By Ray Paulick
Curlin will be retired to stud in 2009 to a yet-to-be-determined farm and his racing career is over unless “an appropriate venue and purse are offered" for one more race in 2008, the reigning Horse of the Year’s majority owner Jess Jackson said.
In a press release distributed late Saturday night, Jackson said offers from various stallion farms will be considered but that the son of Smart Strike out of Sheriff’s Deputy, by Deputy Minister, could end up at Jackson’s Stonestreet Farms, which currently does not stand any stallions.
All inquiries for breeding seasons to Curlin for qualified mares should be directed to Stonestreet Farms director Lesley Howard (e-mail address Lesley.Howard@stonestreetfarms.com, or by calling 859 244-2306).
Still unresolved is a 20% ownership interest in Curlin that has been tied up in a legal case involving his original owners, William Gallion and Shirley Cunningham of Midnight Cry Stable, who sold 80% of Curlin to Jackson, Satish Sanan and George Bolton after the colt won his maiden race. Jackson later bought out the interests of Sanan and Bolton, but the Midnight Cry portion was put under the control of a court-appointed receiver last year after Gallion, Cunningham and another attorney were slapped with a $42-million judgment for their handling of a diet drug class-action lawsuit.
Curlin, the richest North American-trained horse in history with earnings of $10,501,800, will be kept in training for one more potential race in 2008, though in a report in the New York Times Jackson ruled out a run in the Dec. 7 Japan Cup Dirt because of quarantine complications. He also told the Times he plans to breed at least 20 of his best mares from a total of over 100 that Stonestreet Farms maintains.
“If an appropriate venue and purse are offered, we would consider one more race in 2008 for Curlin,” Jackson said in a statement.
“Curlin has proven himself across two continents with 16 starts, the honor of 2007 Horse of the Year and the greatest North American money-earner in racing history,” he continued. “He always gave it his all and has done everything we have asked of him. I am proud to announce that he will start a new career in 2009 and contribute his soundness, stamina, durability and athleticism to the breed. I am looking forward to seeing his foals compete and possibly exceed his unequaled racing record.”
Curlin’s Accomplishments:
- 2007 Horse of the Year.
- Greatest North American money-earner in racing history with earnings of $10,501,800.00
Major wins:
2007 Preakness Stakes
2007 Jockey Club Gold Cup
2007 Breeders’ Cup Classic
2008 Dubai World Cup
2008 Jockey Club Gold Cup
Race Record:
2007 2008
Gulfstream Park Maiden Race — First
Rebel Stakes — First
Arkansas Derby - First
Kentucky Derby - Third
Preakness Stakes - First
Belmont Stakes - Second
Haskell Invitational - Third
Jockey Club Gold Cup - First
Breeders’ Cup Classic - First
Jaguar Trophy Handicap - First
Dubai World Cup - First
Stephen Foster Handicap - First
Man o’ War Stakes (turf)- Second
Woodward Stakes - First
Jockey Club Gold Cup — First
Breeders’ Cup Classic (synthetic track) — Fourth
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Tags: Curlin, curlin retired, curlin retired to stud, curlin to retire, eclipse award, george bolton, horse of the year, Horse Racing, japan cup dirt, jess jackson, lesley howard, midnight cry, midnight cry stable, Paulick Report, Ray Paulick, richest thoroughbred, satish sanan, sheriff's deputy, shirley cunningham, smart strike, streetstreet farms, william gallion
Posted in Curlin, Racing Greats, Uncategorized | 12 Comments »
Sunday, July 13th, 2008
Curlin was the story of the week, in the court room and on the racetrack.
The 2007 Horse of the Year made his grass debut Saturday in Belmont Park’s Man o’ War going 1 3/8 miles and ran a solid race to be second to Red Rocks, the 2006 Breeders’ Cup Turf winner. Solid enough to warrant a trip to France for the Prix de l’Arc de Triomphe in October? Not in my book, not when you consider how much stiffer the competition will be and how much more challenging the conditions at Longchamp figure to be.
The fact that Curlin even raced in New York is a tribute to the power of attorneys. Only a few weeks ago it looked as though the legal entanglement minority owners Shirley Cunningham and William Gallion were in was going to prevent the horse from racing in New York because the owner’s license of Cunningham had expired and the New York State Racing and Wagering Board said it would not resissue the license because it would not be in the best interests of racing. Cunningham and Gallion were on trial at the time on a wire fraud charge related to their legal fees in a class-action lawsuit involving the diet drug Fen-Phen. Attorneys for Jess Jackson, Curlin’s majority owner, fought to turn over the Gallion-Cunningham ownership to a court-appointed receiver, and an attorney for the people in the class-action suit who were allegedly gouged wanted Curlin sold in a public auction.
Gallion and Cunningham are to be retried (with a different judge presiding over the case) after their first trial ended with a hung jury and a mistrial. Jackson’s attorneys won this round and were able to race Curlin in New York.
But the legal entanglement won’t be over until the fat lady involved in the Fen-Phen case sings. Curlin will probably have little babies running around by then.
THE PAULICK REPORT’s anonymous news tip line got word that some past-post betting took place at Tampa Bay Downs on a race from Philadelphia Park June 28, and we had an exclusive report on that incident last Monday. Our friends at the Thoroughbred Times did a quick rewrite of the story later that day, which didn’t go down too well with us. A Paulick Report follow-up focused on the two leading industry trade publications, including Bloodhorse, where I served for 15 years, touching on the cozy relationship those magazines traditionally have with the advertising community, which frequently wield their considerable clout to alter editorial coverage. The article was not meant to categorize Frank Angst, the Thoroughbred Times author who rewrote the Paulick Report story without attribution, as a bad reporter. Not giving credit to another publication is how business is done in the trenches of the Thoroughbred trade publications. Angst, in fact, is a very good reporter whose coverage of the wagering side of the industry has been the best in the business.
The most important lesson to take out of the two articles is the fact that the pari-mutuel industry is operating with an antiquated tote system that could rock the integrity of the very core of the business. Past-posting has occurred, and no one can say with absolute certainty that it isn’t happening more frequently than we know.
THE DISTRIBUTION OF BETTING REVENUE among tracks, horseman’s purses and account wagering companies was at the center of the dispute between Ellis Park and the Kentucky Horsemen’s Benevolent and Protective Association that prompted Ron Geary to throw down the gauntlet and threaten to close Ellis Park for good recently. Geary backed off on his threat, opening the western Kentucky track a week late in what can only be termed a victory for horsemen. They also won a victory against Churchill Downs this past week when a simulcast contract was signed between Florida horsemen and Calder. The account wagering dispute still lingers there, as it does in many jurisdictions where the account wagering companies, especially those owned by racetracks, are getting an increasingly bigger share of the pie.
A new organization, the Thoroughbred Horsemen’s Group, is trying to reshape the business model for account wagering, and the Paulick Report profiled how the THG leaders are going about it.
THE NEWLY APPOINTED KENTUCKY HORSE RACING COMMISSION had its first meeting last week, and indications are that it will be full-speed ahead on regulations or a ban on anabolic steroids. Lo and behold, the makeup of the commission shows some diversity of viewpoints, despite the politics that are inherent in this process, and the Paulick Report gave the governor and his close ally Tracy Farmer two thumbs up on most of the appointments.
FINALLY, THE BREEDERS’ CUP BOARD OF MEMBERS AND TRUSTEES held an election on Friday to fill seven spots on its 14-member board of directors. All five board members seeking reelection won, and two open positions were filled by Helen Alexander of Middlebrook Farm and Roy Jackson of Lael Stables, which raced Barbaro.
I’ll have more on the Breeders’ Cup election in tomorrow’s Paulick Report post.
By Ray Paulick
Copyright ©2008, The Paulick Report
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Tags: Barbaro, Breeders' Cup, churchill downs, Curlin, frank angst, Helen Alexander, jess jackson, kentucky horse racing commissions, past-post betting, Paulick Report, Ray Paulick, Roy Jackson, shirley cunningham, Thoroughbred Horsemen's Group, thoroughbred times, william gallion
Posted in Week in Review | 4 Comments »
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