Jess Jackson is involved in a private bid to buy out the 20% minority interest he doesn't control in reigning Horse of the Year Curlin, but actions in a Kentucky court Nov. 13 on the surface probably won't help speed a decision on the champion colt's future.
A court-appointed receiver representing the parent company of the minority interest recently filed a motion asking a Franklin County, Ky. court to approve the private-sale bid from a limited liability corporation affiliated with Jackson. The asking price is unknown, as the proposed purchase offer was included in documents filed under seal Nov. 10.
Both the receiver and Special Judge Roger Crittenden, who is presiding over a civil lawsuit in Frankfort involving the principal minority owners, confirmed to The Blood-Horse following a related Nov. 13 hearing that the Jackson-affiliated company was the proposed buyer.
The possibility of a private sale came to light after a sealed-bid process failed to produce an acceptable bid for the minority interest held by Midnight Cry Stable, which is affiliated with disbarred attorneys Shirley Cunningham Jr. and William Gallion.
“A private sale was still an option even during the sealed-bid process,” said Sylvius H. von Saucken, a court-appointed receiver for the parent company of Midnight Cry Stable, Tandy LLC. “We’ve asked the court to approve the sale.”
A hearing on the private-sale motion is scheduled to be heard Nov. 17, but Crittenden, following some forceful discussion by various attorneys involved in the litigation, from the bench set a Dec. 1 hearing where evidence will be presented either supporting or opposing the latest effort to sell the minority interest.
“Everyone can have their say,” Crittenden said.
Jackson’s Stonestreet Stables currently controls the majority 80% interest. In previous court hearings, an attorney representing Stonestreet Stables claimed that the “stench” surrounding the minority interest has prevented any decision on the racing or breeding future of Curlin, a premise that was vocalized again Nov. 13.
“No one will breed their mare (to Curlin) while this controversy exists with respect to this 20%,” attorney Richard Getty argued in court.
Getty after the hearing said he had little to say, but offered this statement: "The further delay is unfortunate. I am sure various options will be considered."
An attorney affiliated with Jackson in California said in a telephone interview there was not much he could say about the situation at the present time.
“At this point, we are not going to comment,” said Kevin McGee, a vice president of Stonestreet Stables who is also a personal counsel to Jackson and his other business operations. “We may in the near future, but there is a hearing set for Monday. Between now and then, I don’t think that it is appropriate to comment.”
Crittenden from the bench said he understood that “time is of the essence” in regards to deadlines involved in a decision to retire Curlin to stud or not, but sternly claimed the court was not responsible if such timetables are missed.
“I want to say one thing right here,” he told the assembled group of about 10 attorneys, “this court and its receiver has done nothing that I know of to impede the decision of Stonestreet Stables in regards to this horse, Curlin . . . the receiver has a duty to the court to maintain those assets…and that’s what the receiver has done.”
The deadline for the sealed-bid process, which was authorized by the court in October, ended Nov. 5. The receiver was appointed by court order in November 2007 with specific instructions to "act in connection with the net sale proceeds...from a sale of the 20% interest...in Curlin, or breeding rights” in the colt.
“We have been charged by the court to maximize the interest (in Curlin) and protect the assets in Tandy,” von Saucken said.
Tandy is managed by Cunningham and Gallion, who are battling criminal and civil actions in relation to their role in handling the $200-million settlement realized in the prominent class-action suit involving the diet drug fen-phen. A Kentucky state judge previously awarded a $42-million judgment in the civil trial against the two attorneys and others, and the potential sale of Curlin’s minority interest was ordered to help satisfy those judgment obligations.
The judgment and some other developments in the civil case, which was filed on behalf of about 400 former clients Cunningham and Gallion represented in the fen-phen action, have been appealed to a Kentucky appellate court.
Cunningham and Gallion originally purchased Curlin for $57,000 at the 2005 Keeneland September yearling sale, but sold an 80% interest in February 2007 to a group that included Stonestreet Stables. The Jackson-led entity later bought out the other partners in the majority interest, Padua Stables and George Bolton.
Curlin is North America’s all-time leader in race earnings at $10,501,800, more than a third of which ($3,705,000) was earned in March for his overseas victory in the Emirates Airline Dubai World Cup (UAE-I). Most recently, the seven-time grade I winner was fourth in the Breeders’ Cup Classic (gr. I) at Santa Anita Park Oct. 25.
