At the Keeneland September 2004 yearling sale, Jackson through Narvick paid $450,000 for a yearling by first-year sire Brahms out of the mare Tally Ho Annie that was consigned by Eaton Sales, agent. "Headley received a secret and undisclosed commission from the consignor of such horse and provided a portion of the secret payment to Narvick," according to the lawsuit.Jackson alleges when he bought Maggy Hawk, the dam of Afleet Alex, he paid $750,000, "relying on de Seroux and/or Narvick that such price was the actual price being paid to the seller...John Silvertand...Silvertand, through his agent, agreed to a sale price of $600,000 and received from de Seroux or Narvick...that amount," according to the court papers. Tom Bachman, general manager of Jackson's California operation, "was contacted by Silvertand and learned Silvertand had sold Maggy Hawk for $600,000, not the $750,000 paid by Jackson," according to the lawsuit.Also, at the Keeneland 2004 November breeding stock sale, Jackson alleges that de Seroux, through Narvick, "received a 2% commission on every horse within the Franks Estate dispersal purchased by Jackson...from Hill 'n' Dale Farm without ever disclosing such payment to Jackson...funds that represent an undisclosed, unwritten and improper commission."Jackson is asking for a jury trial on all counts of his complaint as well as financial relief.Attorney Michael Meuser, who represents de Seroux, declined comment on the suit.
California wine magnate Jess Jackson has filed suit in California Superior Court in San Diego against three former advisors, charging them with fraudulent misrepresentation, breach of fiduciary duty, and unjust enrichment in the purchase of horses both privately and at public sales.Named in the suit, filed by Jackson and his operating entities of Four Star Stables and Stonestreet Thoroughbred Holdings, are bloodstock agent Emmanuel de Seroux and his companies Narvick International and Continental Bloodstock; trainer Bruce Headley; and Brad Martin. Continental Bloodstock was formed in Ireland and listed on that country's company registry until 2000, when it administratively dissolved, the suit says. (Another Continental Bloodstock, which has operated in Lexington, Ky. since 1983, is unrelated to the entity named in the lawsuit).Jackson, founder of Kendall-Jackson Wine Estates, began making a big splash in Thoroughbred purchases in 2003, and has subsequently bought not only tens of millions of dollars worth of bloodstock, but farms as well, including the former Buckram Oak Farm near Lexington and Adena Springs near Versailles. The suit, dated Sept. 22, alleges that the "defendants acted pursuant to a conspiracy to defraud Jackson." Jackson claims that Headley was hired by him to advise "what horses he should bid on and purchase and what prices he should pay," while Martin "also participated in the process of selecting and bidding and encouraged and recommended horses to be bid upon as well as prices..." Twenty months after Headley began advising Jackson on yearling purchases and training the horses bought, Jackson claims just three of 18 horses bought made it to the racetrack. Jackson subsequently sought out third parties to evaluate the horses. "Such efforts revealed that a number of the horses had been purchased at inflated prices," according to the suit, and that "Headley and/or Martin were at the time of such purchases engaged in a conspiracy to artificially increase the level of bidding on horses...and may have received undisclosed commissions from consignors or sellers of the horses purchased by Jackson."Subsequently, Jackson hired de Seroux "as his principal bloodstock agent/advisor concerning the private acquisition of bloodstock," according to the suit, on the understanding de Seroux would be paid by the seller a 5% commission for each horse Jackson purchased. The suit says de Seroux negotiated the purchase of more than 30 horses in 2004 and 2005 by Jackson. Jackson charges in the lawsuit that de Seroux, Headley, and Martin "obtained secret commissions, payments, or profits or other things of value from consignors, sellers, or other agents in return for assuring that Jackson would purchase their horses or interests in horses at inflated prices." "Defendants...artificially inflated the purchase prices of horses bought by Jackson both at auction or privately and failed to communicate the vendor's actual private sale prices for the purpose of receiving undisclosed commissions or payments," according to Jackson's suit. Jackson claims that the difference between the amounts actually received by the sellers and the amounts paid by Jackson is "at least $3.2 million." The suit claims that from October 2003 through May 2005, "over $700,000 was paid by check or wire transfer from de Seroux or Narvick to or for the benefit of Headley," and "Martin received payments by de Seroux or Narvick...in excess of $200,000 as a share of the illegal and undisclosed profits derived from Jackson."Specific transactions are mentioned in the suit, such as Jackson's purchase of the colt Rhythm Mad. Jackson claims de Seroux requested from Jackson $850,000 for the colt, but the owner of Rhythm Mad, Oostvlaamse, received $675,000. Jackson alleges that each time he requested a bill of sale reflecting the price and details of transactions, "de Seroux represented that no bills of sale existed...and failed to disclose the actual purchase price paid to vendors."