LOS ANGELES (CN) – A former partner of a California thoroughbred horse racing company is suing the company for $40 million for a breach of contract, according to a lawsuit filed in Los Angeles County Superior Court on Wednesday.
Keith Brackpool, British-American investor, worked for the Stronach Group for five years and says he was promised to be reimbursed a 5 percent buyout for his interest in the company.
Brackpool was brought into the organization in 2013. Prior to that time, Brackpool served on the California Horse Racing Board, which has authority over the regulation of horse racing and betting at licensed tracks in the state.
He was no stranger to the races, as Brackpool served for three years as chairman of that board.
Stronach Group founder Frank Stronach is an Austrian and Canadian business man, the founder of an international automotive parts company and the 19th wealthiest Canadian, according to Canadian Business.
Brackpool was offered a partner role in the Stronach organization’s Racing Gaming Group and was placed as a chairman of California operations.
During negotiations, Brackpool secured a 5 percent ownership interest and there was also an arrangement to finance that purchase. To entice him to join the organization, Brackpool was showed the Racing Game Group’s 2012 schedule of assets, which valued the organization at $993 million, according to the 26-page lawsuit.
In the agreement, there was an exit clause that said Brackpool’s 5 percent ownership would be repurchased using a formula that included “the greater of a) Adjust Book Value [or] b) 10x profits of Racing Gaming Group,” according to the lawsuit.
The day after signing the agreement, The Stronach Group announced the terms of the deal to the public in a press release that said Brackpool acquired a “minority equity stake” in the racing group.
For five years, Brackpool says he received financial schedules from the Stronach Group that reflected the 5 percent interest, the accruing financing charges associated with his purchase and other financial statements.
Today, The Stronach Group’s value is approximately $1.7 billion, according to the complaint, which is an increase of about $700 million during the five year period when Brackpool was with the organization.
Last October, Brackpool and the organization decided he would leave on his fifth anniversary. That’s when Brackpool said he learned the organization would refuse to honor the agreement.
At first, discussions of him leaving “seemed productive,” but suddenly the defendants “changed course and claimed there was never an agreement” the lawsuit says.
Brackpool names the Stronach Group, a holding and financing company, Los Angeles Turf Club, Inc. and Frank Stronach in the lawsuit for negligent misrepresentation, breach of contract and several other charges.
Now he’s off to the races and seeks at least $40 million and will also seek compensatory damages as well as punitive damages “to punish defendant’s reprehensible conduct,” the lawsuit says.
He’s represented by Beverly Hills attorneys Michael Eisner and Jeremiah Reynolds.