Even the “Horse Capital of the World” is not immune to the economic downturn that our country has been facing since 2008. While the equine industry has always been a business filled with risks, those risks have mounted. With fewer people having the economic flexibility and confidence to invest money into a horse, stables across the Bluegrass have felt the strain. Horse racing to some is a fun hobby while to others it is a way of life—the differences between the multi-millionaire farms and the small farms are many. The disparities that exist in the prices obtained in the established horse sales are well-known. More reserves not being met, and there are vast ranges in bidding and interest. As members of our equine industry continue to face several financial challenges, primarily due to loss of income, cost increase, and decreased profits, bankruptcy will continue to be a strategy utilized by the industry to deal with bad debt and other financial concerns.
In this current economic climate, Chapter 11 bankruptcy can be a useful tool to restructure debts or provide a method to sell assets and wind down operations in the ordinary course as opposed to in a fire sale or at the courthouse steps. The attorneys of DelCotto Law Group have worked before with troubled equine situations, and we understand that caring for the animals is a big concern. Specific issues that we have encountered, analyzed, and addressed in equine situations include but are not limited to:
- Lease assumption, rejection or assignment
- Analysis of all liens including vets, breeding, etc.
- 363 sales to maximize value and work within established sales at auction houses
- Lien perfection issues involving jockey club papers
- Priority disputes between agister's liens and bank liens
- Syndication and share disputes
- Insurance adequacy and availability
- Critical venders and 503(b)(9) claims if filing for bankruptcy