Curlin is racing under legal cloud
By New York Times News Service
Published June 5, 2007
When Curlin chased down the Kentucky Derby winner Street Sense to capture the Preakness Stakes, his owners bounded to the winners' circle at Pimlico Race Course. They were an eclectic bunch that included former Clearwater computer magnate Satish Sanan; a winemaker; an investment banker; and two lawyers.
W.L. Carter was just as ecstatic while his wife narrated the race over his cell phone as he drove through the horse country of Ocala. "They could hear me all the way up to Gainesville, " he said.
But his delight depends on the answer to one of racing's thorniest questions: Who will Curlin be running for in the Belmont Stakes on Saturday?
Carter believes he has a piece of Curlin, a mammoth chestnut colt whose value increases with every stride of his brief but brilliant career and who is already worth as much as $30-million as a stallion prospect.
Carter is among more than 400 plaintiffs in a civil suit who were found to have been defrauded by their lawyers out of $64.4-million - money intended to pay for injuries caused by the diet drug fen-phen.
Two of those lawyers, William J. Gallion and Shirley A. Cunningham Jr., together own a fifth of Curlin and were in the Pimlico winners' circle.
"We own part of that horse - there's about 400 of us, " Carter said. "We may not have our names on the papers, but it's our horse. He was bought with our blood money."
It may soon be up to the courts to determine just who owns Curlin. Gallion and Cunningham have had their law licenses suspended. A federal grand jury has begun to investigate potential criminal wrongdoing arising from the fen-phen settlement.
Angela M. Ford, who represents Carter and most of the other plaintiffs, argues that her clients own all of Curlin. She contends that Gallion and Cunningham originally purchased the colt with ill-gotten gains - they paid $57, 000 for the colt at the 2005 Keeneland September Yearling Sale - and had no legal right to sell 80 percent of the horse for $3.5-million, as they did in February. Sanan and his wife, Anne, as owners of Padua Stables near Ocala, purchased a reported 29-percent stake.
"If the court determines that Curlin was originally purchased with money that belonged to my clients, then the entire horse belongs to my clients and clear title could not have been conveyed, " Ford said.
Gallion's and Cunningham's partners are no strangers to the vagaries of the horse business.
Sanan, who made his fortune addressing the computer concerns brought on by Y2K, said he had been victimized by slick horse traders. It prompted him to push for a code of ethics for sellers and buyers. Sanan is now in the forefront of the industry's reform movement.
Sanan said that he and his partners were not aware of the legal problems faced by Gallion and Cunningham when they purchased their portion of Curlin. He says that the lawyers who worked on the contract on their behalf have, however, assured them that their interest in the colt is protected.
Still, Sanan concedes that having a colt competing in Triple Crown races under a legal cloud is not the face he or the sport of thoroughbred racing wants to put forward.
"I don't think it says a whole lot good about the industry, to be honest with you, " said Sanan, who said he had spent $150-million breeding and racing horses. It takes the limelight away from the horse."
Sanan said he and the other partners are focused solely on Curlin and have found Cunningham and Gallion pleasant team members. On the night before the Preakness, the group met for dinner. They will unite in New York on Saturday to see if Curlin can win for the fifth time in six races when he goes in the Belmont Stakes, the final leg of thoroughbred racing's Triple Crown.
Carter, a builder of industrial models from Lawrenceburg, Ky., will be watching the Belmont intently, rooting for a horse and its growing worth, a value he someday hopes to share in.
"I'm cheering for the colt, " Carter said. "He was bought with stolen money, but I want Curlin to do well. He is one magnificent racehorse, and I'm invested in him."
[Last modified June 6, 2007, 12:29:55]
[an error occurred while processing this directive]