Receiver: Curlin Bids Will Go Forward
by Ryan Conley
Date Posted: 10/16/2008 6:34:29 PM
Last Updated: 10/18/2008 2:07:01 PM
The court-appointed receiver managing the minority ownership in Horse of the Year Curlin said the sealed-bid process established Oct. 15 to possibly sell the 20% interest in the champion colt will go forward, despite a motion filed in attempt to halt it.
Sylvius H. von Saucken, a Cincinnati attorney who is part of the assigned receivership managing the business affairs of Midnight Cry Stable’s operating entity, Tandy LLC, told The Blood-Horse Oct. 16 he has full court authority to go forward with the process, which will be marketed by Keeneland.
“We have a Sept. 25 court order authorizing the receiver of Tandy LLC to enter into and engage a sealed-bid process,” he said. “Since Sept. 25, the receiver has been actively engaged in working to provide this opportunity to the rest of the industry.”
Von Saucken said he was not swayed in any way by a motion asking to set aside the order, which was signed by Franklin County Special Judge Roger Crittenden. The judge is presiding over the Kentucky state civil lawsuit against Midnight Cry’s principals, attorneys Shirley Cunningham Jr. and William Gallion.
“That does not stop the proceedings,” von Saucken said of the motion, which was filed Oct. 10 by attorney Andre Regard. “Mr. Regard knows how to stop this, and that is by appealing to the appeals court. Judge Crittenden made that clear to anyone who attended the hearing (where he signed the order).”
Regard’s motion, which was criticized by Curlin’s majority owner Jess Jackson’s Stonestreet Stables, revived previous claims that the court has no authority to establish a receiver for the collection of a judgment from a limited liability company. A judgment of $42 million, which has been appealed, was previously entered against Cunningham, Gallion, and others, in the civil action brought by former clients of the attorneys involved in the fen-phen class-action lawsuit.
"Failure of this court to follow the law ... taints this entire proceeding and questions the authority of the court to even allow for a potential sale of any interest in Curlin," the motion said, further asserting the management of Tandy resides with Cunningham and Gallion.
But von Saucken said he sees no reason not to go forward with the sealed-bid process, which will run through Nov. 5.
“This is a process to establish a value for this great horse,” he said, claiming the receiver consulted various industry experts to determine the best way to handle the controversial sale. “The best result possible would be to get Curlin out of the legal process.”
Von Saucken said there are three important sale conditions to which bidders must acknowledge: the receiver has the right to accept or reject any bids, Stonestreet Stables has the right of first refusal on any bid, and the final bid must be approved by the court.
If a bid is deemed appropriate, von Saucken said it would first be submitted to Stonestreet Stables, which could match any offer and gain 100% control of Curlin. Any successful bid would then have to be approved at a hearing conducted by Crittenden, where objections by any party to the lawsuit would be heard.
Von Saucken said proceeds from the sale would likely be held and managed by the receiver until the appeal of the $42-million judgment is resolved.
“The funds will be held, but the future of Curlin will not be held up,” he said.
If a sufficient bid isn’t received, von Saucken said the process will still be worthwhile.
“We would be in the same position as before, but we will have helped establish a value for the interest,” he said. “We are confident that this opportunity is something that should be offered to the equine industry.”
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