Gulf Coast Seeks to Have Lien Claim Withdrawn
by Ron Mitchell
Date Posted: 3/9/2011 3:36:22 PM
Last Updated: 3/10/2011 10:02:01 AM
A Circuit Court judge has scheduled a hearing for March 10 to determine whether Fifth Third Bank must withdraw a lien claim to 20 horses scheduled to be sold next week at the Ocala Breeders’ Sales Company’s 2-year-olds in training sale.
The horses scheduled to be sold at the March 15 auction are products of a mare leasing program undertaken by Gulf Coast Farms, which has been sued by Fifth Third for allegedly defaulting on loans totaling $15 million. Gulf Coast principals Jerry Bailey and Lance Robinson, and others, have filed a countersuit, claiming they have not defaulted on the notes and is seeking at least $4 million in compensatory damages and at least $12 million in punitive damages, the exact amounts to be determined by the court.
Circuit Court Judge Thomas Clark will consider a motion filed by Richard Getty on behalf of Gulf Coast that contends the OBS sale horses are not subject to liens filed by Fifth Third as part of the lawsuit. Gulf Coast had pledged horses as collateral on the loans which Fifth Third alleges are in default.
According to the motion, the horses consigned to the sale were produced under the Mare Lease Programs, in which mares owned by Gulf Coast are leased to third-party lessees. Under the lease program, the lessee pays a lease fee for the mare, and for that breeding year that mare is bred to a stallion of the lessee’s choice. The lessee pays for the lease of the mare and the stud fee. Any resulting foal is then sold as either a yearling or as a 2-year-old with the proceeds, after any outstanding stud fees, consignor’s fees, and related expenses.
“Fifth Third has been informed repeatedly by the Gulf Coast defendants that the 20 2-year-old horses set to be sold at the upcoming OBS sale are lessee-owned horses, which are the property of the various lessees,” the motion states.
By asserting a lien or security interest in the 20 lessee horses to be sold at the OBS sale, Fifth Third has wrongfully asserted a claim to a portion of the sale proceeds in violation of the property rights of the various lessees,” the filing states.
The motion asks the court to enter an order directing Fifth Third to withdraw any claim to the sale proceeds of the horses to be sold at OBS.
The horses are hip numbers 1, 71, 147, 148, 151, 212, 264, 279, 326, 332, 343, 346, 352, 375, 414, 437, 451, 453, 457, and 477.
Copyright © 2013 The Blood-Horse, Inc. All Rights Reserved.