04/15/2010 11:00PM

Stonewall Stallions faces a pair of lawsuits


LEXINGTON, Ky. - Stonewall Stallions, the Midway, Ky., operation that sold a majority interest in Medaglia d'Oro to Darley last June, is facing one lawsuit over the stallion's 2009 income and another claiming the farm owner has defaulted on $15.2 million in loans.

In a suit filed last November in U.S. District Court in Pennsylvania, Harleysville National Bank and Trust in Pennsylvania alleges that Stonewall, its owner Audrey Haisfield, her husband Richard Haisfield, and two related entities - NeverTell Farm and Overall Thoroughbreds - defaulted on $11,145,928.98 in principal, interest, and late charges on a loan to refinance Stonewall Farm, and on $4,086,297.62 on a loan to purchase one or more stallions.

In April 9 court filings, Audrey Haisfield responded that she "has no knowledge of and disputes the amounts that plaintiff claims were disbursed to Overall Thoroughbreds" and "further disputes the amounts that plaintiff claims Overall paid back are accurate."

A farm employee said that Audrey and Richard Haisfield were traveling Thursday. They did not return a call seeking comment. Their Philadelphia-based attorneys in the Harleysville case responded that it is the firm's policy not to comment on pending litigation.

Attorneys for Harleysville National Bank also would not comment on pending litigation.

The Harleysville bank's complaint says it notified the Haisfields they were in default by a letter dated June 25, 2009, almost three weeks after Stonewall and other shareholders, including a group named MDO, LLC, had signed a private bill of sale selling Medaglia d'Oro to Darley. The price was private but reportedly based on a total valuation of between $40 million and $45 million.

On March 15, 2010, the MDO group, which owned six lifetime breeding rights in Medaglia d'Oro before the stallion's sale to Darley, filed suit in Woodford County Circuit Court alleging Stonewall violated a 2009 breeding season agreement by failing to pay out 2009 Northern Hemisphere breeding income due to MDO or to place shareholders' stallion income in an escrow account.

MDO, managed by Florida attorney Robert Lee Shapiro, is seeking unspecified damages in the case. Other parties named in its suit are other 2009 shareholders in Medaglia d'Oro, including Medaglia I, LLC, whose principal was the Haisfields' son Marc; Palm Beach Stallions I, LLLP; and Colts Neck Stallions, a New Jersey entity associated with Thoroughbred Daily News publisher Barry Weisbord.

Medaglia d'Oro's stud fee rose from $40,000 to $60,000 through the 2009 breeding season at Stonewall. MDO is in the process of selling its set of six lifetime rights to Darley for $1.8 million in a deal that is will close Aug. 10.

In documents filed April 9, Kevin Henry, the attorney for Marc Haisfield and Palm Beach Stallions, responded by contending that MDO received a $6.2 million payment on June 4, 2009, which covered loans that MDO had made to Stonewall and Audrey Haisfield and other obligations. Upon that payment, Henry's motion contends, the parties signed "mutual releases" that granted Medaglia I and the Haisfields "the broadest form of global release of all claims from the 'MDO Parties,'" including any payments described under the earlier 2009 breeding season agreement.

Shapiro did not return a call seeking comment, but attorney Robert Maclin III, representing MDO, called Haisfield's contention "ridiculous." Maclin noted the release was signed in June 2009, months before revenue from 2009 stud fees were even paid, and clearly didn't apply to future earnings. Stud fees generally are paid in the fall of year bred or upon the birth of the resulting foal.

A hearing is expected in this case in early May.