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Curlin's suitors sealed deal quickly
It was a race watched around the world, and it sent inquiries burning down the telephone lines: "How much do you want for Curlin?"
The date was Feb. 3, 2007, about 3 1/2 months before the chestnut colt would outduel champion Street Sense to win the Preakness Stakes. Curlin had just won his first start, a maiden race at Gulfstream Park, by a startling 12 3/4 lengths. The margin and the circumstances - at one of the winter's most competitive race meetings and while he ran greenly down the stretch - caught the attention of some major racehorse owners. They were all thinking the same thing: This colt could be a classic contender. By 8 o'clock the following morning, Curlin's trainer, Helen Pitts, was fielding phone calls and lucrative offers on behalf of Curlin's owners, Shirley Cunningham Jr. and William Gallion.
Cunningham and Gallion, who race as Midnight Cry Stable, paid $57,000 for Curlin at Keeneland's 2005 September yearling sale. The day after the colt's first race, it was clear he was worth much more. In the end, Cunningham and Gallion sold 80 percent of Curlin for about $3.5 million to three partners. Jess Jackson's Stonestreet Stables purchased 31 percent, Satish and Anne Sanan's Padua Stables bought 29 percent, and WestEnd Capital Management executive George Bolton took 20 percent.
The sudden, striking way the partnership came together reveals the lengths that wealthy owners will go to acquire a legitimate Triple Crown candidate and the strange bedfellows that their passion can create.
Jackson, 77, and Sanan, 57, are vocal advocates for reform in the bloodstock marketplace who have called for horse sellers to be more forthcoming about veterinary procedures and undisclosed ownership interests in their auction stock. Jackson has taken his point to court, suing his former bloodstock advisors for allegedly defrauding him in a number of transactions for horses and farm property.
Cunningham, 52, and Gallion, 55, are Kentucky lawyers who are accused of defrauding their own clients. The Kentucky Supreme Court suspended their law licenses after a circuit court judge found they had breached their duties in a class-action lawsuit over the diet drug fen-phen. The judge, William Wehr, ruled last year that Cunningham, Gallion, and a third lawyer defrauded 400 clients out of $64omillion from a total settlement of $200 million. Wehr has yet to rule on damages, but any damage payments could involve Cunningham's and Gallion's interests in Curlin. Cunningham and Gallion have denied any wrongdoing. Cunningham did not return calls seeking comment, and Gallion's cell phone went dead when he was asked about the fen-phen settlement case.
Questions about Cunningham and Gallion have dogged the partners since Curlin was pointing to the Kentucky Derby, where he finished third. Whatever legal trouble Midnight Cry Stable's principals might be having, it hasn't affected Curlin's ability to run. And it hasn't dampened the partnership's delight over the Preakness win, which gave each member his first classic victory. With the defection of Kentucky Derby winner Street Sense, Curlin figures to be a solid favorite in the Belmont Stakes.
Interested parties wasted no time
Satish Sanan watched Curlin's first race via simulcast before heading to England and India on business. The first call he made on Feb. 4 was to his son, Sasha, Padua's racing manager.
"I watch hundreds of races a week, and at the weekend start tracking horses," Satish Sanan said. "I can name every single horse last year that we were one of the first to make the call - from Nobiz Like Shobiz to Point Gold to Deadly Dealer - and half of these horses you simply can't buy. People are not willing to sell.
"By this time, we had put a few bids on a few horses and were not successful. I called Sasha from London the next morning, and I told him, 'I watched this horse. He won by 12 lengths and he was almost running into the grandstand. Find out who owns it, and get on it.' "
In Kentucky, bloodstock agent John Moynihan was already on the case, backed by Jackson, the Kendall-Jackson winery owner who also keeps close tabs on up-and-coming racehorses. At his home base in California, Jackson watched the video of Curlin's first race and got first-hand comments about the colt from trainer Steve Asmussen, who had horses stabled in the holding barn alongside Curlin on Feb. 3.
"After his maiden victory, Curlin was what I call a brilliant maiden," Jackson said. "He won by 12 lengths in a nice time, he ran a greater distance than an emerging horse usually does, and he did a brilliant job.
"Steve wanted that horse in his barn. We fit the horse to the trainer, and when you have a precocious horse like this, Steve's especially good at developing a horse like Curlin, especially if the horse is smart, like Curlin is.
"I said, 'Let's put a team together,' because I don't have enough mares, and I wanted to make sure he can be successful as a stallion. There's also the joy of sharing victories with your partners."
Moynihan first contacted Gallion at about 2 p.m. on Feb. 4.
"He was probably the 10th call we had," Gallion said. "He was very much of a gentleman and was very positive in his approach to the whole process. John was the only agent who had nothing negative at all to say about the horse. If you watched the race, he ran greenly, came out on the turn, and ran greenly down the stretch. I thought those were negotiating points for a number of potential bidders. Keep in mind, he wasn't for sale. These were unsolicited offers.
"John said, 'We love the horse, and we think he's got potential to do great things.' So there was a connection."
In building the partnership, Moynihan tapped familiar contacts.
Moynihan called Sanan, who had traveled from London to Bombay and on to Bangalore. When he reached Delhi, India, on Feb. 4, Moynihan caught up with him by telephone in the middle of the night. "I had once told John, 'We're wanting to find a Derby horse. If you find one and Jess wants to own a piece of it, give me a call, and vice versa,' " Sanan said. "When he called me that night, I told him, 'You better call Sasha because we don't want to be bidding against each other,' "
Moynihan also called Bolton, who has owned racehorses since 1989, some in partnership with Sanan. Bolton, an investment advisor, helped Sanan take his software company, IMRglobal, public in the 1990s. Bolton, 44, was throwing a Super Bowl party for six or seven families at his house in Pacific Heights, Calif., when Moynihan called on Feb. 4.
"I'd seen the race the day before," Bolton said. "We all had watched the film, and it was so spectacular. It was easy to be excited about Curlin."
By the end of Super Bowl Sunday, little more than 24 hours after Curlin had won his debut, the multimillion-dollar deal was largely in place. On Feb. 7, Curlin shipped out of Pitts's barn to Asmussen's at Fair Grounds in Louisiana.
"When we were putting this together, it moved so fast," Moynihan said. "It came together over a six- or seven-hour period. I had told Jess, 'I want to buy him, we need to buy him now, this horse will be gone tomorrow.' I think what really helped us, in all honesty, was the Super Bowl. Had it not been the day after the race, I think a lot of people would have pursued the colt. I think because of the Super Bowl, a lot of people waited until Monday morning."
When they signed up to become Curlin's largest stakeholders, neither Sanan nor Jackson was aware of Gallion's and Cunningham's complicated legal situation.
"I didn't even know who Midnight Cry was," Sanan said. "The first time I met them was at the Arkansas Derby. . . . We had very little in common with the Midnight Cry people. They wanted to stay in the horse, and I think they got a very good deal. They paid $57,000 for the horse, they took $3 million and some off the table, and stayed in for 20 percent. They look very smart."
"Understand: We saw the horse," Jackson said. "At 2 a.m. the following morning, we had the deal. I didn't have the time to check the background on anyone. When we did hear about it, you know, in America people are innocent until proven guilty. It was irrelevant to the horse - he doesn't know who they are - and to his racing and stud career. We're devoted to celebrating the horse, the racing, and the friendships."
Could court ruling affect Curlin's ownership?
If the partnership is uneasy, it doesn't show in the winner's circle, and the members have publicly affirmed their camaraderie.
Recalling a pre-Preakness dinner party he hosted for them at his family's Baltimore-area farm the night before the Preakness, Bolton said: "Everybody was there, the energy was good, everyone came early and stayed late. There was a very, very positive feeling in the air. It was like, 'We're having such a good time as a group, wouldn't it be nice if we could add a win to it?' You just had the feeling that maybe it was Curlin's day."
Whether that good feeling lasts into Curlin's eventual stud career might depend on what happens next in the fen-phen case.
"I don't yet have a judgment," said Lexington attorney Angela Ford, who is representing the fen-phen plaintiffs who have sued Cunningham and Gallion. "But if a judgment is entered, any assets the lawyers own will be a target for collection."
That conceivably could put more than Gallion and Cunningham's 20-percent stake at risk, according to Ford, who estimates a ruling on damages could come in the next few weeks. "If Curlin originally was purchased with money that belonged to my clients and a court determines that, then the entire horse may belong to my clients," Ford said. "Clear title could not have been conveyed" to Jackson, Sanan, and Bolton under those circumstances, she said.
But Jackson's lawyer, Kevin McGee, said the new partners' shares in the colt were protected against a claim from the class-action plaintiffs.
"There are protections for bona fide purchasers," McGee said. "The agreement to buy Curlin was done by people who have nothing to do with any of that. They paid a fair price, and it was a legitimate business deal."
Although Gallion did not comment on the lawsuit, he was happy to recall the first time he saw Curlin, at the Keeneland September sale in 2005.
"Ken McPeek has an excellent eye for a horse, and he said he saw a Porsche of a horse and a Picasso in the making," Gallion said, referring to the trainer who was his buying agent. "He was a very athletic looking horse with a very strong personality. He has a determined look in his eye.
"Helen Pitts and her staff were very high on this horse. We had no intention of selling him. No one knew how good he was going to be when he went in the starting gate on Feb. 3. He showed tremendous ability, and coming out of that race we were all smiles. Then the phone started ringing."
Those calls led to an unlikely partnership and one of American racing's most coveted trophies.
"We bought what we thought was a nice horse who had a nice future ahead of him," Bolton said. "It was almost surreal to walk into the winner's circle at the Preakness with a horse that broke his maiden in February."