NEWS
ThoroGraph appeals judgment over sale of Rachel Alexandra
Posted: Tuesday, August 31, 2010 5:21 PM
by Jeff Lowe
Jerry Brown and ThoroGraph Inc. have appealed a circuit court judgment in a case centering on Mike Lauffer’s private purchase of a 50% interest in eventual Horse of the Year Rachel Alexandra prior to her first stakes win in November 2008.
Brown, the founder of ThoroGraph, claims Lauffer only made the purchase after receiving proprietary information that Brown provided as a consultant, and that he knew of Brown’s standard commission rate of 5% of the purchase price, 5% of future earnings, and 5% of any increase in the horse’s value from the time of purchase to the end of the horse’s racing career.
Lauffer paid $500,000 for the half-interest but did not pay Brown a commission. He and partner Dolphus Morrison ended up selling Rachel Alexandra privately to a partnership of Jess Jackson’s Stonestreet Stable and Harold T. McCormick for $10-million following her victory in the Kentucky Oaks (G1) last May. Between the sale and Rachel Alexandra’s race earnings for the partnership of Lauffer and Morrison, Lauffer profited about $4.5-million.
In an April trial, the Johnson Circuit Court in Lauffer’s hometown of Paintsville, Kentucky, found that Lauffer owed Brown 5% of the purchase price, or $25,000.
In the appeal filed on August 27, Brown seeks his full standard commission and the $4.5-million profit that he claims should be stripped from Lauffer as a “disgorgement of ill-gotten gains,” for a total amount of $4,771,423.
Lauffer declined to comment on Tuesday afternoon.
Jeff Lowe is a Thoroughbred Times staff writer
READER COMMENTS
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Posted by: Jim, San Francisco, CA on September 01, 2010 at 06:01 PM
Jerry Brown ain't "America's Sweetheart," but Lauffer gave his word and then stiffed him!
THAT is what's wrong with this deal; indeed Jim (from Queens), that's also what's wrong with the Thoroughbred Industry - empty promises.
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Posted by: Peter, Elmont, NY on September 01, 2010 at 04:54 PM
Here's an idea. Let's all stop using Thorograph. Jerry Brown is crazy if he thinks he should get $4.7 million. What a moron. We should put him out of business. After this suit, who would deal with him in the future. Any horseman could tell Rachel was a great filly; you didn't need Brown for that.
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Posted by: Jim, Queens, NY on September 01, 2010 at 01:16 PM
This is exactly what is wrong with the thoroughbred industry---every one think's it's okay to have your hand in the owner's pocket. That is why owners are leaving the industry every day. How stupid is it for Brown to even suggest that he hets 5% of everything. Why not take the man's first born child as well? Get real.
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Posted by: Joe, NY, NY on September 01, 2010 at 11:43 AM
What??? He didn't ask for 5% of the future offspring sales and/or earnings as well!!!
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Posted by: zak, Lexington, KY on August 31, 2010 at 10:38 PM
No written agreement, and no clear and convincing evidence that anyone agreed to pay the "standard" commission. Attorney's fees are going to eat what little commission was earned.
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