A California Thoroughbred owner who is attempting to buy shares in two prominent stallions said that Lane's End Farm, where the horses reside, might be hiding information from the stallions' owners.
Jerry Jamgotchian, who won a judgment Friday in U.S. District Court to force Lane's End to deliver his offer to buy a share in Lemon Drop Kid and a share in Kingmambo, questioned why the farm blocked the offers, made last fall.
"Lane's End was doing this just to try to delay the transaction," Jamgotchian said Monday. "The question is why? ... My position is Lane's End wants to keep me out because I'm going to go in there and audit the books."
Jamgotchian said he wants to know whether "secret deals have been made with syndicate members" and not disclosed to other members.
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William Hoskins, attorney for Lane's End, declined to comment on Jamgotchian's remarks.
"He's never made such a comment to Lane's End, so it wouldn't be appropriate," Hoskins said.
"In our minds, the issue that we presented to the court was whether a dual agent, who is also the prospective buyer, can use an out-of-market commission to inflate the purchase price in what might be an effort to disadvantage or defraud persons who hold a right of first refusal," Hoskins said. "We appreciated the judge's advice, and we've followed."
Jamgotchian, representing KNC Investments, made offers last fall to buy a share of Lemon Drop Kid for $350,000 and a share in Kingmambo for $175,000. Both deals included commissions of $50,000 to Jamgotchian, which the sellers agreed to pay.
Lemon Drop Kid stands at stud for $35,000; Kingmambo has been pensioned.
On Friday, U.S. District Judge Karen Caldwell ordered the farm to forward the offers — including the commissions — to other syndicate members to possibly match. The farm had sought an injunction against that, arguing that the commissions were larger than were normally paid and that members would be at a competitive disadvantage because Jamgotchian, as buyer, would get back some of his money.
Jamgotchian's attorney, Richard Getty, said the opinion is significant because it reinforces that stallion syndicate managers are merely conduits between owners.
The farm, which is owned by former U.S. Ambassador Will Farish, said Monday that the offers were sent out Friday, and members have until Feb. 8 to match or decline. If more than one member matches the offer, then the winner will be determined by a drawing, Hoskins said.
Jamgotchian said his offer to buy the share of Kingmambo stands, even though the stallion has been retired.
"I think Lane's End may be hiding important information from syndicate members," Jamgotchian said. "I believe Kingmambo is still a valuable commodity on the market ... . There might be some distributions still to be made to syndicate members."