Prominent trainer Scott Lake has filed for Chapter 11 bankruptcy reorganization in a New York federal court, according to recent filings.
Lake, who is seventh all-time in training wins with 4,571 through March 12, recently filed an individual voluntary petition in the U.S. Bankruptcy Court Eastern District of New York. The petition claims the trainer on March 4 had between $500,001 and $1 million in assets, and between $1,000,001 and $10,000,000 in liabilities.
When contacted by telephone March 13, Lake told The Blood-Horse: “For you to print something in your magazine about this is a classless move.”
The largest 20 unsecured creditors filed with the petition are listed with a combined $1,177,479 in claims, including those with a feed company and veterinary groups, among others. The petition claims there are between 50 and 99 total creditors. The street address used for the debtor is the same as Belmont Park.
In a voice-mail left March 14, Lake told The Blood-Horse he didn’t handle his earlier interview the way he should have, citing other issues with which he was dealing with at the time, and referred further comment to his New York attorney, Ken Reynolds.
Reynolds acknowledged Lake’s claims later published in Daily Racing Form that his client’s financial troubles were related to an unidentified friend who served as the trainer’s accountant. Lake told the Form that his friend allegedly stole $1.2 million from his operation over a five-year period and failed to file federal tax returns on the trainer's behalf.
“There is a component to his financial situation that does derive from that,” Reynolds told The Blood-Horse March 14. “You have lost funds and tax consequences, so that is part of why he is in the situation.”
But Reynolds claims the alleged actions of the accountant had “nothing to do” with Lake’s business dealings as a trainer, noting that “trade debt” does not make up the bulk of claims. According to the petition, a little more than $750,000 of the largest secured creditors are listed as “mortgages” with three financial institutions, while just more than $300,000 is listed as “trade” debt.
“(Lake’s) objective of the (bankruptcy reorganization) is to continue in business, and use the same employees and service providers,” Reynolds said.
Lake, who trains for multiple clients at multiple racetracks, led North America trainers in wins four times: 2000 (337 wins), 2001 (407), 2003 (457), and 2006 (528). He also finished second to Steve Asmussen in 2002 (400), 2004 (374), 2005 (417), 2007 (485), and 2008 (421). In 2009, Lake is second with 67 wins, trailing Asmussen's 111.
He was an Eclipse Award finalist two times (in 2000 and 2001). His career earnings are $83,025,355.
Chapter 11 bankruptcy is generally described as a court option that allows the debtor to continue to operate his or her business while a reorganization plan with creditors is developed and approved.