08/25/2010 2:56PM

Stonewall files new motion


The bankrupt Stonewall Farm entities that own the stallions Value Plus and Da Stoops have filed motions opposing a lender’s effort to take over and sell the sires at the Keeneland November auction.

The lender, a successor to Cincinnati Capital Corporation named Stone Wall Acquisition, had filed an emergency motion in order to take control of the horses in time to enter them in the Keeneland auction. But Stonewall Farm argued in court filings on Aug. 24 that Value Plus and Da Stoops are their ownership entities’ primary assets and are fundamentally important to their Chapter 11 reorganization plan.

Both horses are now advertised at Stonewall’s new Ocala, Fla., farm.

Stone Wall Acquisition had argued in Aug. 15 filings that the values of Value Plus and Da Stoops has deteriorated and was likely to continue to deteriorate during the bankruptcy cases. The lender had based its assertion, in part, on appraisals by bloodstock consultant Ric Waldman.

The Stonewall entities called Stone Wall Acquisition’s argument “speculative at best,” noting that the Thoroughbred market downturn is a major factor in decreasing bloodstock values and that Stonewall expects both stallions’ books to increase in Ocala. According to court documents, the number of paid breedings to Da Stoops rose from 10 in Kentucky in 2009 to 49 in Ocala in 2010. Value Plus relocated after the 2010 breeding season “after Stonewall IV saw how much better Da Stoops, owned by a related entity, Stonewall Stallions XI, LLC, performed after being moved to Florida,” the filings say. While still in Kentucky, Value Plus’s paid book dropped from 70 in 2009 to 17 in 2010, which Stonewall says accounts for the sire’s lowered appraisal.

According to Jockey Club statistics for 2009, Value Plus bred a total of 104 mares and Da Stoops bred a total of 24 mares that year. The Jockey Club bases its numbers on Reports of Mares Bred, which can include both free matings under foal-share agreements, for example, as well as paid matings.

“Further, due to the success of his progeny in recent races, it is likely [Value Plus] will command a higher stud fee than the $5,200 he stood for in Kentucky in 2010,” according to Stonewall’s filings, which used an average based on the stallion’s advertised fee of $7,500 and various discounts the farm offered breeders.

Stone Wall Acquisition’s predecessor in the case, Cincinnati Capital, has received a $16 million judgment in a Pennsylvania court against Stonewall and its owner, Audrey Haisfield, in unpaid loans. But that case has been on hold since several entities named in Stone Wall Acquisition’s Pennsylvania suit filed for Chapter 11 bankruptcy protection in Florida.

Stone Wall Acquisition is one of three lenders that has sued Stonewall and its various related entities. Earlier this year, Fifth Third sued for about $14 million; many of Stonewall’s mares and young stock are in receivership as part of an agreement between the two parties. JPMorgan Chase has sued for about $7 million in a case that is still pending.