Trainer Kenny McPeek has filed a lawsuit in Kentucky against a company involving two jailed attorneys who are part owners of leading Horse of the Year candidate Curlin, alleging he is owed money from the previous sale of the horse.
McPeek filed a breach of contract lawsuit Nov. 9 in Jefferson County Circuit Court, claiming in part that Midnight Cry Stable owners William Gallion and Shirley Cunningham Jr. failed to pay a 5% commission totaling $175,000 on the February sale of 80% of Curlin to Stonestreet Stables, Padua Stables, and George Bolton.
The lawsuit claims McPeek signed an agreement in 2002 with the parent company of Midnight Cry Stables, Tandy LLC, that would give him a 5% commission on purchases and all sales of certain horses in which he represented Gallion and Cunningham’s interests, as well as two lifetime breeding rights to those runners that were retired to stud.
McPeek, who is credited with picking out the son of Smart Strike at the 2005 Keeneland September yearling sale, where he purchased the colt for $57,000, said the lawsuit had to be filed to protect his interests.
“We have a clear business arrangement with our clients, and with the complicated nature of this thing, it’s a business decision we had to make,” McPeek said, noting he regularly employs similar compensation agreements as the one signed with Gallion and Cunningham. “It’s a difficult decision for everybody. Nobody enjoys these things, but you have to do what is best for you and your family.”
Don Cox, a Louisville attorney who represents McPeek in the action, said the trainer first tried to resolve issues with Gallion and Cunningham out of court.
“They had discussions all through the summer, and they kept putting him off,” Cox said. “They ought to give this guy a medal for buying this horse for $57,000. We never did anything but great work for them.”
Andre F. Regard, an attorney who represents Tandy LLC, said Nov. 13 he hadn't seen a copy of the complaint, and didn't want to comment on the specifics of it until he had reviewed it. But Regard said his clients have paid McPeek all the money he is owed.
"My client clearly holds the position that they have paid Kenny a commission on every good horse he has bought for them, and for every bad horse he has bought for them," he said.In addition to Curlin, the complaint lists a group of McPeek-related horses that includes gr. I-winner Einstein, Mary Cat, Kentucky Warrior, Golden Thief, and Byenne.
Gallion and Cunningham are currently incarcerated in a Boone County, Ky., jail for reasons related to a federal criminal action involving the settlement of the fen-phen diet drug lawsuit.
The two attorneys are entangled in various legal battles over their representation of plaintiffs in the fen-phen class-action lawsuit, and a Kentucky circuit court judge recently ruled that certain funds from Curlin’s race earnings and future sale proceeds could be distributed to the plaintiffs.
Cox indicated the charging order signed by Circuit Court Judge William Wehr was a wake-up call for his client. “That really brought it to our attention that we needed to do something,” he said.
Richard Getty, a Lexington attorney who represents Jess Jackson’s Stonestreet Stables, said the lawsuit doesn’t seek a claim on the ownership interest of Curlin. Stonestreet Stables and Bolton recently bought out the interest owned by Padua Stables.
“It has nothing to do with the ownership structure of Curlin,” Getty said. “It’s a simple breach of contract lawsuit in which McPeek says he has a claim against Tandy LLC, which is doing business as Midnight Cry Stable.”
Curlin recently finished a 2007 campaign in which he won the Breeders’ Cup Classic – Powered by Dodge (gr. I), the Preakness Stakes (gr. I),The Jockey Club Gold Cup (gr. I), the Arkansas Derby (gr. II), and the Rebel Stakes (gr. III).
Gallion and Cunningham sold the interests in Curlin for a reported $3.5 million some time following the colt’s breakout 12 3/4-length victory in a Feb. 3 maiden special weight race at Gulfstream Park.