Fifth Third Bank has sued prominent Thoroughbred breeder Gulf Coast Farms and related business entities, alleging the breeder defaulted on about $15 million in loans.
Gulf Coast, headed by Gerald F. Bailey and Lance K. Robinson, was the fourth-leading breeder in North America in 2010, with almost $5.6 million in earnings. Gulf Coast bred Preakness winner Lookin At Lucky, the 2009 juvenile champion and 2010 3-year-old champion male.
The suit, filed in Fayette Circuit Court in Lexington on Jan. 5, alleges Gulf Coast owes $6.87 million on a 2009 note and $7.59 million on a 2010 note, as well as $664,500 on another deal.
Thomas W. Miller, attorney for Fifth Third, said the bank would have no comment on the suit.
Citing downturns in the industry, Gulf Coast began dispersing horses last year at Keeneland. "Mare leasing programs are just not a viable option in this economy," Bailey told The Daily Racing Form in October.
The bank is seeking the proceeds from the November and January sales, as well as the sale of one-fourth of the racehorse Kensei, who has been retired to stud.
Richard Getty, attorney for Gulf Coast, said Thursday the breeders plan to countersue the bank.
"They forced all these horses to be sold in November without reserves," Getty said. "It was disastrous."
Fifth Third Bank also has sued other prominent horse breeders recently. In December 2009, the bank alleged Ahmed Zayat's Zayat Stables defaulted on $34 million in loans. After filing for bankruptcy protection, the stable reached a settlement with the bank to pay off the loans.
In May, the bank sued Stonewall Stallions, owned by Richard and Audrey Haisfield, and won a $15.5 million judgment.