by Pete Denk
A 20% interest in Horse of the Year Curlin that has been tied up in legal battles will be offered through a sealed bid process, and Keeneland has been chosen to market the auction.
On September 25, Boone County Circuit Court Judge Roger Crittenden signed an order allowing Matthew L. Garretson, the court-appointed receiver for attorneys Shirley Cunningham Jr. and William Gallion, to offer their minority interest in Curlin for sale through a sealed-bid process.
Gallion and Cunningham own the 20% interest through their corporation, Tandy LLC, which races as Midnight Cry Stables.
“This is a rare opportunity to acquire a significant interest in an extraordinary racehorse and an exciting stallion prospect,” said Geoffrey Russell, Keeneland’s director of sales. “Curlin is arguably one of the greatest horses of the modern era.”
Jess Jackson’s Stonestreet Stables owns the other 80% of Curlin, and Jackson has a right of first refusal on the sale of the remaining 20%. Jackson also is allowed to bid.
Cunningham and Gallion owe their former clients—420 people who took the diet drug combination Fen-Phen—$42-million. Crittenden indicated in April that the fen-phen clients would be entitled to Tandy’s assets.
A criminal trial ended in a hung jury, and Cunningham and Gallion are out of jail after posting bond. They are appealing the civil judgment against them.
Attorney Andre Regard, who represents Gallion and Cunningham, has filed a motion for the court to vacate its order for the sealed bid process, arguing that it is not the best way for Tandy to maximize its value.
“Minority interests are discounted, because as long as Curlin is still running, you don’t have any control,” Regard said. “Additionally, Stonestreet has a right of first refusal. Who’s going to make a legitimate bid when they think it’s going to be matched? Why would someone want to be a minority partner with Stonestreet?
“And amazingly, Stonestreet has the right to bid. If no one has a strong interest, and Stonestreet puts in a bid that’s minimal, just high enough to pass muster by the court, they get to buy it.”
Curlin, out of the Deputy Minister mare Sherriff’s Deputy, has won 11 of 15 races and earned $10,246,800. His nine graded victories include the 2007 Preakness Stakes (G1) and Breeders’ Cup Classic Powered by Dodge (G1).
Deadline for submitting sealed bids is November 5, 2008, at 3 p.m. EST. Sealed bids should be forwarded to Garretson, as receiver, c/o Sylvius von Saucken, Esq. via certified mail or fax at the The Garretson Law Firm, 7775 Cooper Road, Cincinnati, Ohio 45242.
The next scheduled court date is November 13.
Pete Denk is sales editor of Thoroughbred Times