Another Thoroughbred icon is back in court: PNC Bank has filed a claim against the Allen E. Paulson Living Trust for almost $1.6 million and wants to seize champion Azeri's yearling filly.
PNC alleged in a lawsuit filed in Fayette Circuit Court in Lexington on Feb. 12 that the trust defaulted on a loan "by, among other things, failing to make payments on the principal and interest that was due."
Last December, Fifth Third Bank sued Ahmed Zayat, the leading Thoroughbred owner in North America.
PNC said in court documents that the trust was notified Oct. 22 of the default "for the failure to sell certain Equine Collateral."
That collateral includes, but is not limited to, 2002 Horse of the Year Azeri's 2009 filly by 2004 Horse of the Year Ghostzapper as well as a 2009 colt by Shakespeare out of Lola's Dancer, the bank said.
The Ghostzapper filly had been nominated to the Keeneland January sale but was pulled out after her half-brother, Take Control, won a race in December. The Shakespeare-Lola's Dancer colt failed to sell at the 2009 Keeneland November sale.
According to the document, the bank says it has the right to sell the horses at public or private sale and it is seeking immediate possession of the horses as well as $1,578,995.70 plus interest.
The trust originally obtained a $7.5 million revolving line of credit in May 2002 from National City Bank, which was acquired by PNC Bank in late 2008. The loan was amended eight times, as recently as March 2009.
PNC Bank spokesman Fred Solomon said the bank does not comment on pending litigation.
The suit is the latest twist in the saga involving Azeri, who was at the center of a feud among the heirs of the late Allen Paulson, founder of jet maker Gulfstream.
Paulson, an Eclipse Award-winning racehorse owner and breeder, died in 2000. His son Michael fought stepmother Madeleine (who is now married to oilman T. Boone Pickens) for control of the Paulson trust. The vitriolic court battle was settled in California in March 2003 with a deal that allowed Michael Paulson and his brothers to continue the stable. Champion Azeri had been scheduled to be sold in March 2003 but the dispersal was called off after the settlement.
Azeri was retired in late 2004 as the all-time leading female racehorse with more than $4 million in winnings. Her first foal, a colt by top sire A.P. Indy. failed to sell at the 2008 Keeneland September yearling sale despite a $7.7 million bid. Eventually purchased by Kaleem Shah for $1.9 million in the Keeneland April 2-year-olds in Training Sale, the colt was renamed Take Control. He won his career debut at Santa Anita on Dec. 30 but since has been sidelined with shin problems.
Azeri herself went through the Keeneland auction ring in January 2009 but also failed to sell despite a high bid of $4.4 million.
Documents in the PNC suit shed new light on that. According to an extension of the loan agreement, filed in November 2008, the bank required a reserve price on Azeri of $4.4 million. At the time, Michael Paulson said Azeri came "extremely close" to selling. Azeri eventually sold in November 2009 for $2.25 million.
In March 2009, Michael Paulson was removed as trustee by a San Diego court and replaced by James and Vikki Paulson. Efforts to reach a representative of the trust on Tuesday were unsuccessful.