IN RE: CALUMET FARM, INC. CASE NO. 91-51414
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF KENTUCKY
CALUMET FARM, INC. CASE NO. 91-51414
DEBTOR IN POSSESSION
CALUMET FARM, INC. PLAINTIFF
V. ADV. NO. 92-5003
BLACK CHIP STABLES, a Partnership composed and comprised of TERRY BEALL and WILLIAM ALLEN; DORIC, INC.; CRAIG B. SINGER d/b/a SINGER FARM, INC.; AXMAR STABLE, a division of AXMAR INVESTMENT COMPANY; THE RIGGS NATIONAL BANK OF WASHINGTON, D.C.; FIRST CITY TEXAS-HOUSTON, N.A.; J. T. LUNDY; VINCENT TIMPHONY; DUE PROCESS STABLE; WOODROW MARRIOTT; CACOTIN STUD; F.E.N. STABLES CORPORATION and J.M.J. STABLES CORPORATION d/b/a MANGANARO STABLES, a Kentucky Partnership; ROBERT PEREZ; MRS. CARLTON COLE; CALUMET-GUSSIN NO. 1; HILL 'N' DALE FARM; MATCHMAKER FINANCIAL CORPORATION; EQUINE CAPITAL CORPORATION; BAKER, ECKERT & GENDRON, P.S.C. d/b/a WOODFORD VETERINARY CLINIC; and COMMONWEALTH OF KENTUCKY REVENUE CABINET
In conformity with the Memorandum Opinion of the court this day entered, IT IS ORDERED AND ADJUDGED as follows:
1. The motion of Axmar Stable for summary judgment that it is entitled to five 1992 breeding seasons to the stallion WILD AGAIN as follow-up or substitute follow-up seasons for Axmar's use or sale, and is further entitled to subsequent breeding seasons, with an aggregate value of $1,700,000, subject to certain credits, or in the alternative is entitled to a portion of the proceeds of the sale of the estate's interest in WILD AGAIN equal to the value of the breeding seasons to which Axmar claims entitlement, is OVERRULED. Axmar holds only an unsecured claim against the estate of the debtor and does not have any lien on monies in the WILD AGAIN stallion account or on any proceeds that may be realized from the sale of the estate's interest in WILD AGAIN.
2. The joint motion of Calumet-Gussin No. 1 and The Riggs National Bank of Washington, D.C., for partial summary judgment finding that the movants have a right, title and interest in and to $1.5 million in annual breeding seasons to the stallions WILD AGAIN and SECRETO and to any products and proceeds thereof which is superior to the lien of First City, Texas-Houston, N.A. in seasons to these stallions is OVERRULED. Calumet-Gussin No. 1 does not possess and the movant The Riggs National Bank does not have a security interest in any annual breeding seasons to the stallion WILD AGAIN. The annual breeding seasons which the movant Calumet-Gussin No. 1 has to the stallion SECRETO and the security interest of The Riggs National Bank of Washington, D.C. therein do not rise to the level of an ownership interest in or operate as a lien on the stallion SECRETO so as to entitle these defendants to any of the proceeds derived from the sale of the stallion, nor do these defendants have any interest in monies in the SECRETO stallion account resulting from the breeding of the stallion to mares owned by third parties.
3. First City, Texas-Houston, N.A. (now know as Texas Commerce Bank) has a first and prior lien in the debtor's interest in (a) the stallions WILD AGAIN and SECRETO; (b) proceeds of the sale of the stallions; and (c) monies in the WILD AGAIN and SECRETO stallion accounts.
4. The Commonwealth of Kentucky Revenue Cabinet has a statutory lien for taxes that is second in priority to the lien of First City, Texas-Houston, N.A. in the interest of the debtor in the collateral described in paragraph 3 hereof.
5. The motion of the debtor in possession for summary judgment invalidating the security interest of Manganaro Stables in four 1991, 1992, and 1993 seasons to the stallion WILD AGAIN is SUSTAINED.
6. The motion of Woodrow Marriott for summary judgment finding he is the owner of a lifetime breeding right in WILD AGAIN purchased from Doric, Inc. is SUSTAINED.
7. The defendants Matchmaker Financial Corporation and Equine Capital Corporation hold perfected security interests in the lifetime breeding rights of J.T. Lundy to the stallion WILD AGAIN, but are not entitled to any of the proceeds which may be derived from the sale of the debtor's interest in the stallion.
By the court -
All counsel of record