Judge Rules in Favor of Buckram Oak
Date Posted: 12/3/2008 8:11:23 AM
Last Updated: 12/5/2008 3:21:23 PM

Photo: Anne M. Eberhardt

By Ron Mitchell and Ryan Conley

A Circuit Court judge in Lexington has dismissed claims filed by Jess Jackson and his Stonestreet Farm against Buckram Oak Holdings in connection with Jackson’s $17.5 million purchase of the horse farm in February 2005.

In the suit, attorneys for Stonestreet and Jackson claimed that Buckram Oak, then headed by the late Saudi Arabian diplomat and horseman Mahmoud Fustok, worked in collusion with agent Frederic Sauque and others to defraud Jackson in connection with the real estate deal. In court filings, Stonestreet’s attorneys contended that Buckram Oak’s representatives convinced Jackson they would not take less than $17.5 million for the farm.

On Dec. 5, Circuit Judge James Ishmael Jr. granted a motion by attorney Richard Getty, representing Stonestreet, to certify his ruling in favor of Buckram Oak as a final judgment, so the order could be appealed "immediately."

"We fully intend to reverse this opinion on appeal," Getty said. "This (certification of it as a final judgment) allows us to move it to the Court of Appeals, which we believe will result in a reversal."

The suit alleged that Buckram Oak had previously agreed to sell the farm for $15 million, meaning that Jackson paid $2.5 million more for the farm than he would have paid had Buckram Oak/Fustok and the plaintiff’s agents not conspired together.

The suit also claimed that one or more of Jackson’s agents received an “undisclosed and carefully laundered kickback of $500,000 after the closing of the transaction.

In granting Buckram Oak’s motions to dismiss the claims made by Stonestreet/Jackson and in granting summary judgment on behalf of Buckram Oak,  Ishmael concluded that there was no duty by Buckram Oak to disclose prior negotiations or offers for the property.

“This was a discussion, negotiation, and agreement by very sophisticated business persons with an army of professionals behind each of them to sell and purchase a prized property in Kentucky,” the judge wrote. “There was certainly no confidential or fiduciary relationship that existed between the plaintiffs and Buckram Oak…The allegation that Buckram Oak had previously discussed or even offered to sell the farm in question for $15 million was not information that Buckram Oak had any duty under Kentucky law to disclose to the plaintiff. It is noteworthy to the court that Mr. Jackson is reported to have offered that same amount to Buckram Oak prior to the Memo of Agreement of Sale fixed the price at $17.5 million. It is undisputed that Fustok declined to sell the farm at this price to Jackson. Mr. Jackson even agreed that a seller is free to ask any price and to change it at any time.”

Ishmael dismissed the portion of the suit claiming one of Jackson’s agents received a $500,000 “kickback” after the closing by noting that such a transaction would not constitute a breach of the agreement or contract between the parties under Kentucky law.

In addition to dismissing the claims against Buckram Oak, Ishmael also commented on the conduct by attorneys in the case, specifically citing the actions of Jackson’s attorneys.

“The court has already expressed orally, on several occasions, its concern about  the conduct, word used, and written statements in this case. The court is dismayed, to say the least, at some of the conduct exhibited by plaintiff’s representatives…Let there be no misunderstanding that the court expects and demands that all parties, all representatives and all counsel conform their words, language, body language, written words and oral arguments to the highest professional standards. There shall be no further warnings. Violation of these professional standards will be sanctioned by the court forwith. Everyone should be guided accordingly.”

It's unclear what impact Ishmael's order will have on Sauque, an international bloodstock agent who was characterized by the plaintiffs as an agent for Buckram Oak in the farm sale. Stonestreet has also alleged Sauque was involved in fradulent horse sales. Other defendants originally named in the lawsuit have either reached a settlement with Stonestreet, or have been dismissed.



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