Attorneys for James McIngvale have asked a Texas judge to drop Kentucky-based agency Eaton Sales from the list of named defendants in the horse owner’s fraud lawsuit.
Eaton Sales was one of seven individuals or entities added in January to a lawsuit that previously included trainer Bob Baffert and bloodstock agents and brothers J.B. and Kevin McKathan, a legal action that claims at least 19 purchases made on behalf of McIngvale in 2001-2004 involved fraudulent dealings.
“Newly obtained information and documentation” suggests Eaton Sales had no part in fraudulent transactions allegedly involving Baffert and the McKathan brothers, according to documents filed in U.S. District Court for the Southern District of Texas in Galveston.
“We should have never been named in the lawsuit to begin with,” said Reiley McDonald, who operates Eaton Sales along with business partner Tom VanMeter. “Eaton Sales never paid any commissions to the McKathan Brothers; Eaton Sales was never approached by the McKathan Brothers to pay them a commission.
“We have been dropped, but we haven’t received an apology from McIngvale’s attorneys, or from Mr. McIngvale, despite the fact they have mistakenly imputed our integrity publicly.”
Neither McIngvale nor his attorneys immediately returned calls seeking comment. U.S. District Judge Samuel B. Kent would have to sign the proposed motion to make the dismissal effective.
In addition to Baffert and the McKathan brothers, others still named in the lawsuit are Celebrity Farms, Highclere Sales, Hill ‘n’ Dale Sales Agency, Donato Lanni, David McKathan, and Murray Smith.
The amended complaint for the most part lumps the consignors together as a group, and provides no individual allegations. The complaint lists 19 sales totaling $5.47 million that allegedly involved “secret commissions or kickback(s).”
VanMeter and McDonald said their company’s reputation had been sullied by the accusations and were considering legal recourse.
“Reiley and I and our attorneys are considering an appropriate response,” VanMeter said.
Baffert, who formerly trained horses for McIngvale, and the McKathans, who formerly had an oral agreement to buy horses on behalf of the furniture tycoon, have denied their part in any fraudulent dealings. The more recently-named consignors have not eclipsed deadlines for filing answers, though some, such as Hill ‘n’ Dale Sales Agency and Lanni, its director of bloodstock services, have publicly claimed innocence.
The McKathans have filed a counter-claim, alleging McIngvale reneged on agreements to supply the agents with lifetime breeding rights to certain stallions. McIngvale has responded in filings that no such arrangements existed.
A settlement conference originally scheduled for May 4 has been moved up to April 27 per collective agreement, citing potential conflicts with the May 5 Kentucky Derby.
