04/10/2015 4:55PM

Creditors seek $230M from stable founder Moreno

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A U.S. trustee for the creditors of a bankrupt company owned by Mike Moreno, the founder of Southern Equine Stables, has said in a petition he is seeking $230 million from Moreno and his affiliated companies, claiming Moreno breached his fiduciary duties to the company to the detriment of its creditors.

The petition, filed April 6 in U.S. Bankruptcy Court in Delaware, revolves around the bankruptcy and dissolution of a company called Green Field Energy Services, which Moreno created in 2011 from the assets of another company. Green Field, which specialized in oil-field services and hydraulic fracturing, filed for Chapter 11 bankruptcy in 2013 after it defaulted on $330 million in debt. The Chapter 11 bankruptcy was converted into a Chapter 7 bankruptcy in 2014, and all of the company’s assets were liquidated.

In the petition filed with the court, U.S. trustee Alan Halperin claimed Moreno “used a constellation of satellite companies to provide services” to Green Field even though he knew the company’s business model could not be sustained. Halperin claimed the companies, which were controlled by Moreno, were used to extract money from Green Field for his own benefit and the benefit of his associates before it collapsed.

Trustees are appointed to seek the maximum returns for a company’s creditors through petitions to the bankruptcy court. Last year, an examiner appointed by the bankruptcy court also had been critical of Moreno’s management of Green Field during its brief lifespan.

Moreno, a resident of Louisiana, founded Southern Equine in the late 1990s. The stable, whose principal trainer is Eric Guillot, has campaigned Grade 1 winners Moreno, Champagne D’Oro, Mi Sueno, and Santa Teresita. In 2008, Moreno bought out a partner in the mare Better Than Honour by bidding $14 million for her at the Keeneland November sale, a world-record auction price for a mare. Moreno had owned 70 percent of the mare when she went into the ring.