10/14/2007 11:00PM

Jockeys' Guild files for bankruptcy

EmailThe Jockeys' Guild filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the Western Division of Kentucky last Friday, according to the organization.

The guild, which represents approximately 1,300 Thoroughbred and Quarter Horse riders, has struggled to find secure financial footing for the past several years. In its Chapter 11 filing, the guild estimates that it has assets of less than $1 million but more than $100,000, and that its liabilities exceed $1 million but are less than $100 million.

In a statement, the guild's national manager, Terry Meyocks, said that the bankruptcy filing was "the best way to deal with this and other issues facing the guild.

"We hope that declaring Chapter 11 will give the guild some breathing room to explore solutions for its insurance and other difficulties," Meyocks said.

Reached on Monday, Meyocks declined to comment beyond the release.

Through a voluntary dues system, guild members are provided with health insurance and representation on issues affecting riders. The cost of health insurance has been rising steadily for all U.S. workers, and especially so for jockeys.

Lea Goff, the guild's bankruptcy attorney, said that riders who participate in the health-insurance program would continue to receive coverage despite the bankruptcy filing. During the next several months, the guild will attempt to "look at ways to increase its revenues so that it can continue to provide health insurance for riders" under a reorganized business plan, Goff said.

Filing for Chapter 11 bankruptcy allows businesses to be protected from creditors' claims while developing a reorganization plan, which has to be approved by the bankruptcy court. The process of developing and approving a plan can take months or years.

Meyocks, a former racetrack executive whose father was a jockeys' agent, was brought into the guild in early September, replacing Dwight Manley, a coin dealer and former sports agent who was hired in the summer of 2006. Manley was the guild's first national manager since November 2005, when the guild's board of directors fired its previous national manager, L. Wayne Gertmenian.

In the guild's bankruptcy filing, Gertmenian is listed as the largest creditor and is owed $915,000 for a "contract dispute," according to the filing. In addition, Matrix Capital Associates, a company owned by Gertmenian, is owed $156,000, also for a contract dispute, and Albert Fiss, the guild's former vice president under Gertmenian, is owed $125,000, according to the filing.

Goff said that the amounts owed to Gertmenian, Matrix, and Fiss were in dispute by the guild, and that the totals did not represent debts that the guild believed it should pay.

In 2006, the guild sued Gertmenian and Matrix, alleging that Gertmenian took improper compensation during his four-year tenure at the organization. The lawsuit, filed in Monrovia, Calif., was scheduled to go to trial on Tuesday, and seeks $1 million. Gertmenian and Matrix have filed countersuits to the guild's suit seeking past pay.

Manley loaned the guild $500,000 when he was brought aboard the organization last year, and in the bankruptcy filing, the guild says that Manley is owed $591,000 for an "unsecured loan."

On Monday, Manley said the terms of the loan were for six years, with the first year being interest-free. He said he did not know why the total liability would be for $591,000, though the calculation of the liability may have included the principal and the total amount of interest due by the end of the six-year loan period. Goff said that the calculation likely included the total amount due over the loan period, but said she did not know for sure.

Manley also said that though the guild had financial problems during his tenure, he did not seriously consider ever filing for bankruptcy.

"Bankruptcy is more than a tool, it's a scar," Manley said. "I didn't think that it was a scar that the guild should inflict upon themselves."

The guild also listed a debt of $47,000 to Doug McCord, the owner of an accounting service in Nicholasville, Ky., for "lease obligations." McCord said that the guild had recently signed a lease for office space in Lexington through his company, and that guild officials had told them that they were moving the guild's headquarters. The guild's office has been located in Monrovia since shortly after Gertmenian was hired in 2001, but the office was previously based in Lexington.