01/22/2008 12:00AM

No ruling in case on Curlin

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FRANKFORT, Ky. - The ownership of Curlin, the 2007 Horse of the Year, remained unchanged Tuesday after a circuit court judge declined to grant a motion of foreclosure against William Gallion and Shirley Cunningham Jr., the jailed lawyers who are 20-percent partners in the horse.

Judge Roger Crittenden said during a 90-minute hearing at the Franklin County Courthouse that it is "totally premature right now" to foreclose on Tandy LLC, the partnership in Curlin that is held by Gallion and Cunningham. The foreclosure was sought by 418 plaintiffs who are seeking to be paid a $42 million judgment handed down last fall after a class-action civil suit against Gallion and Cunningham. The lawyers were accused of misappropriating tens of millions of dollars in a $200 million settlement that they reached on behalf of the plaintiffs with the maker of the diet-drug combination fen-phen.

Eighty percent of Curlin is owned by the Stonestreet Stables of Jess Jackson, who said Monday night at the Eclipse Awards in California that the colt would race as a 4-year-old in 2008. Jackson has already bought out two previous partners in the horse, Padua Stables and George Bolton, and the remaining 20 percent interest has become an issue in the class-action case.

Angela Ford, lawyer for the plaintiffs, was seeking to have the 20-percent interest in Curlin put up for public auction as a means of partially settling the judgment. Last November, a Kentucky judge ruled that the plaintiffs were entitled to future earnings from Gallion's and Cunningham's interest in Curlin.

Although Jackson said that Curlin will race at 4, it has not been determined where and when he will make his first start of the season or what his first major goal will be. Curlin has been nominated to the Dubai World Cup on March 29, but trainer Steve Asmussen said he would have to confer with Jackson before pointing Curlin to any specific race. Curlin has already posted three timed workouts, and Asmussen said the horse is ready to do more.

"He works again Thursday, and off of that, he'll be looking to pick it up considerably," Asmussen said Tuesday by phone. "It's getting to be that time where we'll need to decide something."

Gallion and Cunningham have been jailed in northern Kentucky since August while awaiting a criminal trial May 12 on fraud charges stemming from the fen-phen settlement.

Gallion and Cunningham, under the Midnight Cry Stable banner, bought Curlin for $57,000 at a 2005 yearling auction. After the colt easily won his first start last February at Gulfstream Park, Stonestreet, Padua, and Bolton bought in for $3.5 million, with Midnight Cry retaining 20 percent interest.

Richard Getty, the attorney representing Stonestreet, attended the hearing and seemed bemused at one point when Andre Regard, an attorney for Tandy, made a request that Stonestreet no longer be permitted to intervene in the proceedings. Crittenden quickly denied the request.

"We will continue to monitor these proceedings closely," Getty said afterward. "Obviously we don't want anything to happen without our knowledge."

Jackson has said the complications of the case have had an effect on the potential sale of Curlin for the colt's breeding rights. In all, nearly a dozen lawyers were present at an otherwise sparsely attended hearing. One of them, Mary Meade-McKenzie, representing Gallion, told the court she believed the case would drag out "two or three years, not including appeals. We may be 10 years out on a resolution of this case."

Crittenden set Feb. 19 as the next hearing date.

- additional reporting by Marcus Hersh