Kentucky proudly calls itself the “Horse Capital of the World”. 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, smaller 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. 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.
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