Court Order Clears Way for ClassicStar Dispersal
Updated: Friday, November 3, 2006 11:55 PM
Posted: Friday, November 3, 2006 6:31 PM
A federal judge has signed an order that fully clears the way for horses cataloged in the ClassicStar dispersal to be sold in the Nov. 5 Fasig-Tipton Kentucky select mixed sale.
The document signed by U.S. District Court Judge Joe Hood Nov. 2 also orders ClassicStar not to distribute assets "out of the ordinary course of business" until such time as the legal dispute involving the former broodmare lease operator and four breeders is resolved.
The order allows for the proceeds of the dispersal sale to be distributed to ClassicStar's "secured creditors," which include Fifth Third Bank and Fasig-Tipton, among others. Both the bank and auction company had previously extended mortgages totaling $14 million combined on the ClassicStar Farm property located near Versailles, Ky.
Exempt from the order's stipulations are four unnamed horses in the dispersal, mares that are "owned by partnerships and limited liability companies" outside the ClassicStar umbrella. It is believed that ClassicStar is consigning those mares on behalf of those unidentified clients.
In a Lexington courthouse Oct. 3, Hood heard arguments for a temporary restraining order regarding the assets of ClassicStar and related affiliates, specifically in regards to the dispersal, which features more than 70 broodmares, many of which are of high-profile nature. At the hearing, attorneys for the plaintiffs argued that money available for any potential damages could be distributed by ClassicStar in ways that would be difficult to track.
The restraining order was never signed into effect.
The lawsuit, originally filed in July, claims that three breeder entities were frauded out of millions of dollars by investing in ClassicStar broodmare lease programs. A fourth breeding group was added to the plaintiffs list in September.
ClassicStar managing partner Tony Ferguson is also named in the suit, along with former marketing director David Plummer. Ferguson and his affiliated defendants recently filed a dismissal motion for most charges in the legal action.
Plummer, who left ClassicStar just weeks before a Feb. 23 federal raid on the Kentucky farm property, has filed a motion through separate counsel asking to join the dismissal motion.
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