Updated on 09/24/2010 4:16PM

Details disclosed on Lemon Drop Kid, Kingmambo deals


LEXINGTON, Ky. - Thoroughbred shareholders Ashley Andrews and Robert Raphaelson have provided details of an offer, including details of buyer's representative Jerry Jamgotchian's fee, to purchase a share in Lemon Drop Kid and Kingmambo to the syndicates that stand those stallions at Lane's End in Versailles, Ky.

A Woodford County, Ky., Circuit Court judge had asked Andrews, Raphaleson, Jamgotchian, and the buyer on whose behalf Jamgotchian was working, a group called KNC Investments, to produce details of its purchase bid after Lane's End Stallions successfully petitioned for a temporary restraining order to delay the sale and required KNC Investments or the selling shareholders to disclose those details.

Jamgotchian, who said he holds a minority stake in KNC Investments, had made the purchase offers to Andrews, a shareholder in classic winner and sire Lemon Drop Kid, and Raphaelson, Andrews' partner in a share of Kingmambo.

According to court filings, Andrews and Raphaelson accepted the offers, under which KNC Investments would pay Andrews $350,000 for a share in Lemon Drop Kid and would pay Andrews and Raphaelson $175,000 for a share in Kingmambo. The purchase prices were to include commissions that Jamgotchian said would cover his costs, including legal fees, as well as a consultant's fee for the transactions.

On Sept. 15, about a week after Andrews and Raphaelson notified the stallions' syndicates of the offers, Lane's End filed a petition against Andrews, Jamgotchian and KNC Investments, and Nevada resident Raphaelson. Lane's End alleged Andrews and Raphaelson violated the terms of the stallions' syndicate agreements by accepting the offers without offering a right of first refusal to other shareholders. They also alleged that Jamgotchian violated Kentucky's prohibition of undisclosed dual agency, in which a person receives payment from both buyer and seller in a transaction without disclosing the situation to all parties, because the purchase offers "included payment of a commission to Jamgotchian as dual agent for both the purchaser, KNC Investments, and the seller."

According to the Lane's End petition, Andrews and Raphaelson declined to disclose terms of the sales, including the amount of Jamgotchian's commission. Both cited a confidentiality agreement with Jamgotchian, according to Lane's End's petition.

On Thursday afternoon, as part of the offer tendered to Lane's End, Jamgotchian disclosed the terms of the agreement, under which he would receive a $50,000 payment, from which he will pay expenses, for each share purchase. The agreement also notes that Jamgotchian has disclosed his payment from both sides of the transactions.

"Since full disclosure in the horse racing industry is very important, my clients have agreed to immediately provide the syndicate manager with copies of both approved offers," Jamgotchian said late Thursday afternoon by e-mail. "The syndicate members now have seven business days to make a decision to match or not match the offers, as tendered. My clients anxiously await direction from the syndicate manager pursuant to all requirements and obligations contained in the respective syndicate agreements, as well as the submitted offers."

Jamgotchian said that the syndicates now have seven days to decide whether or not to match the offer for the shares.

William Hoskins, attorney for Lane's End, said, "We're glad that, after repeated requests, apparently the information is going to be forthcoming. We'll look at that information and decide how to proceed."