Updated on 05/04/2012 2:47PM

Thoroughbred Retirement Foundation sued by New York State

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New York State's attorney general, Eric Schneiderman, filed suit Thursday against the Thoroughbred Retirement Foundation, the nation's largest non-profit retirement group for Thoroughbred racehorses, alleging that the group's board "put horses in danger and [TRF] finances in ruin."

The retirement foundation's chairman, John C. Moore, said Thursday afternoon that he had not seen the complaint but denied its allegations as reported by news outlets.

"It's a hell of a shame," Moore said. "We've been working with this attorney general, trying to educate him about the truth concerning the TRF for the last 13 months, and that he would resort to bringing this action, which is based on so many lies and inaccuracies, it just shocks me. It's a waste of taxpayers' money, and it's only going to hurt the horses."

Moore is named as a defendant in the suit, as are Thoroughbred Retirement Foundation, Inc.; the foundation's president, Mike Lakow; the group's co-founder, secretary, and director of external affairs, Diana Pikulski; current board members Hayward R. Pressman, Rob Hinkle, Leslie Priggen, and Margaret "Peggy" Santulli, and former board member John S. Rainey.

Barry Ostrager, senior litigation partner at Simpson Thacher & Bartlett and the current president of the New York Thoroughbred Breeders, is representing the retirement foundation. In January, the board of the breeders’ group voted to donate $10,000 to the retirement foundation.

The New York attorney general's suit seeks the foundation board's removal and a judgment that all defendants be barred from reelection to the board. In addition, it seeks to enjoin the foundation from accepting new horses without court approval and calls for a temporary receiver for the foundation pending the board's reconstitution. The Thoroughbred Retirement Foundation currently cares for about 1,100 horses at 30 facilities, Moore said.

The suit accuses the Saratoga Springs-based not-for-profit and its board  of "failing to properly oversee and manage the organization's finances in light of TRF's unique responsibility for the welfare of more than 1,100 retired Thoroughbred racehorses," according to the complaint. "By accepting more Thoroughbreds than TRF could afford to support and failing to provide adequate funding to its boarding facilities, TRF's directors drove the organization into insolvency and caused the neglect, suffering, and even death of horses in its herd. Over the past year, the board has engaged in a series of financially irresponsible transactions, borrowing to pay off existing debt and invading TRF's restricted endowment fund, that have damaged further TRF's ability to fulfill its charitable purpose of protecting Thoroughbreds from neglect and mistreatment."

The complaint alleges that the retirement foundation paid satellite boarding facilities inadequately and also failed to oversee those facilities, leading to what the complaint termed a spike in horse deaths after 2006. According to the complaint, there were 45 deaths in the foundation herd between 2004 and 2006, but more than 315 horses died between 2007 and 2011, with "nearly 100" dying in 2010.

"Many TRF horses do not receive adequate feed to supplement pasture grazing, particularly in the winter months, and much of the herd does not receive required maintenance care, such as tooth filing and hoof trimming, when needed," the complaint said. "Horses have been deprived of proper treatment for injuries and medical conditions and turned out without adequate shelter. At some TRF facilities, TRF horses have suffered severe malnourishment, prolonged and unnecessary pain, and death from starvation and exposure."

Moore, the foundation's chairman, disputed those allegations. "The health of the herd is absolutely fine," he said. "I have veterinarian reports from every farm, and I don't know of any horses that are in danger. I don't know of any horses that are not in good condition. If there are horses that are not in good condition, they're being cared for and being given supplemental feed, and they're generally 25 or 30 years old."

Moore said attorney general Schneiderman sent out an unannounced inspector to Wallkill Farm in New York about two months ago to look at foundation horses stabled there. "They recommended immediate care for them," Moore said. "One needed his feet trimmed, the other needed dental care. They were 29 and 32 years old. He has no idea that that's like 110 years old for a human being. One of them was a little thin. He's looking for things, but he's found nothing."

The court filing comes 14 months after a New York Times report alleged that many of the horses in the Thoroughbred Retirement Foundation's care but located at satellite facilities were in need of urgent care or were neglected or starving. That report cited inspections by an independent veterinarian, Dr. Stacey Huntington, whose report for 857 horses was completed the following month. Contacted by the Daily Racing Form about a month after the Times story, Huntington characterized the problems she found as "not widespread. Some problems, but not widespread. Some things that just need to be taken care of."

The May 3 complaint says more than 10 percent of the horses examined by Huntington had Henneke body scores below 4, a rating that commonly-used body-scoring system classes as "moderately thin."

The retirement foundation stopped cooperating with Huntington after the Times report appeared on March 19, 2011. In 2011, the foundation sued its largest benefactor, executors for the Mellon Estate, for slander, alleging that the executors "engaged in a campaign of vilification." That dispute stems from a disagreement over the use of Mellon fund annual disbursements as collateral to secure a loan from a South Carolina bank.

The retirement foundation has acknowledged difficulty in fund-raising, citing lack of Thoroughbred industry support, a large herd, and fund-raising slowdowns during the recession.

"We'll beat it," because we have the facts on our side," Moore said of the attorney general's suit. "The herd is fine, we have done nothing as a board to justify criticism, other than not raising enough money."