An attempt by two shareholders to sell shares in Lemon Drop Kid and Kingmambo remains in limbo as syndicate manager Lane’s End Farm has requested that some terms of the deal be restructured.
Lane’s End initially filed for and received a temporary restraining order holding up the sale of the Lemon Drop Kid share owned by Ashley Andrews and the Kingmambo share owned by Andrews and Robert Raphaelson. A entity known as KNC Investments, represented by prominent owner-breeder Jerry Jamgotchian, had offered $350,000 (including commission) for the Lemon Drop Kid share and $175,000 (including commission) for the Kingmambo share.
In its request for the TRO, Lane’s End said the sellers had violated terms of the syndicate agreements by accepting the offers without offering a right of first refusal to other shareholders. Lane’s End also sought a breakdown on the commission amounts involved in the transactions.
According to the response from the share buyer, Jamgotchian was acting in a dual agent capacity on behalf of buyer and seller, with each offer including a $50,000 commission to Jamgotchian.
In a Sept. 21 letter to attorneys for the buyers and sellers of the shares, attorney Jay Ingle, on behalf of the syndicate manager, noted that KNC Investments had 10 days in which to opt out of the deal. Once that 10-day period had ended, other syndicate members would be notified of the offers and given the right to exercise their first refusal.
Ingle requested the commissions being paid Jamgotchian be reduced to an industry standard of 5% of the purchase price for each share should one or both be picked up by another shareholder. Under those terms, instead of getting $50,000 in commissions for each if purchased by KNC Investments, Jamgotchian would receive a $15,000 commission if the Lemon Drop Kid share is picked up by another shareholder and $6,250 if the Kingmambo share is picked up.
Jamgotchian said the commissions were structured to cover legal costs and other fees associated with the sale of the shares.
Lane’s End owner Will Farish told The Blood-Horse that Kingmambo’s stallion career is over due to a recurring neck problem that has precluded the stallion from covering many mares.
But Jamgotchian said Sept. 21 he believes Kingmambo will be able to service mares in 2011.
Ingle said if the buyer and sellers agree to the restructured commission rates, then "we will proceed accordingly."
If, however, there is no agreement to the terms outlined in Ingle’s letter, then "perhaps the best course would be to seek the assistance of the court to resolve any differences and provide us guidance. We believe seeking the court’s guidance up front would be in the best interests of all involved, especially given the number of syndicate members who could be affected."
Jamgotchian said Sept. 21 he had not thoroughly reviewed Ingle’s letter and did not know if the altered terms would be acceptable to the buyer and seller.