11/19/2013 6:41PM

Thoroughbred Retirement Foundation, New York attorney general settle lawsuit


A lawsuit brought by the attorney general of New York alleging that the Thoroughbred Retirement Foundation, one of the largest caretakers of retired Thoroughbreds in the racing industry, mistreated animals in its herd has been settled, both sides said Tuesday in separate releases that differed markedly in tone.

The settlement, which will require the TRF to make several changes to its board and hire a new chief executive, ends a legal and public-relations battle that had lasted more than two years, threatened the existence of the TRF, and brought harsh publicity to the nonprofit organization. TRF officials said Tuesday they were relieved to have the suit settled while continuing to maintain that allegations in the suit were unjustified and part of a campaign orchestrated to discredit the organization.

Eric Schneiderman, the New York attorney general, filed the lawsuit in May 2012, just over a year after a veterinarian hired by the executors of the estate of one of the TRF’s most high-profile former donors alleged that animals in the TRF herd were starving and mistreated. At the time, the executors were embroiled in a financial dispute with the TRF, which had been operating at a deficit for several years.

The TRF resolutely challenged the veterinarian’s assertions throughout the controversy. In its release announcing the settlement, John Moore, the TRF’s chairman and chief executive, said, “We are relieved to have behind us this nuisance suit that the NYAG should be embarrassed to have initiated.”

Diane Pikulski, the TRF director of external affairs who will be required under the settlement to resign from the board but not from the organization itself, said Tuesday in an interview that the accusations of mismanagement of the herd were “misguided and untrue.”

A release from Schneiderman said the attorney general’s office had hired independent veterinarians to inspect the TRF’s herd, which numbers approximately 1,000 horses and is located on properties owned by the organization, on satellite farms that are paid a per diem to care for the horses, and at 10 prisons that run “equine therapy programs.”

“While conditions at certain farms still need improvement, the neglect and mistreatment that gave rise to the suit has been substantially remedied,” the release said.

In an interview, Moore disputed that statement but said, “We will live with the criticism because people in the industry know that we are trying to do the right thing.”

The settlement of the suit signed by both parties makes no mention of any allegation of mistreatment of animals other than to note that the TRF and its officers “deny any and all wrongdoing in connection with the facts and claims that have or could have been alleged against them … and have asserted a number of defenses to plaintiff’s claims.”

The suit also had touched on a controversy between the TRF board and the executors of the estate of Paul Mellon, which donated $7 million to the TRF in 2001, two years after Mellon’s death, for an endowment. The dispute between the two parties centered on the estate’s objection to a complex arrangement in which the TRF used disbursements from the endowment to secure a loan when the TRF was running a deficit in 2011. A portion of the loan was used to repay a loan the Mellon estate had provided in 2007.

The TRF later filed a lawsuit against the estate alleging that the estate slandered and libeled the organization, citing in part the inspections by the veterinarian leading to the allegations of mistreatment. The TRF withdrew the suit, with both sides arguing over the reasons for doing so.

The TRF acknowledged that it had been experiencing financial difficulties since the downturn in the economy in 2008, but it denied that horses were receiving substandard care as a result. The release from Schneiderman said that as a result of the lawsuit, the size of the TRF herd had been reduced by one-third. Moore also disputed that statement, saying the herd had been reduced from approximately 1,350 horses to approximately 1,080 from 2008 to 2011, before the controversy arose and a year prior to the suit being filed by Schneiderman.

The settlement reached Tuesday will require the TRF to place on its board a veterinarian appointed by the attorney general’s office and reserve seats on the board for one director nominated by a “reputable animal-welfare organization” chosen by the attorney general’s office and another who is “an associate or member of a national horseracing institution, such as The Jockey Club, Thoroughbred Owners and Breeders Association or Jockey’s Guild [sic],” according to the settlement agreement.

The TRF also will be required to hire a new chief executive within one year. When the chief executive is hired, both Pikulski and Moore will be required to resign their positions on the board within 12 months, while Moore, who has not received a salary as TRF chief executive, will have to resign as chief executive, according to the settlement. At that time, Pikulski will “discontinue her service as vice president of external affairs and begin service as director of external affairs with responsibility for fund raising,” the settlement said.

Moore said in the interview that the TRF plans to expand its board from nine members to 12 to make room for the new appointments. He said the organization might expand the board further to 15 members “as we again begin to ramp up our fundraising efforts,” which have been hampered since the allegations first arose, he said.