An e-mail with the Subject line of: OS 1044 pops into my inbox the today. I'm intrigued. After claiming two horses at Del Mar and marking up the groups by about 35% (near as I can figure) maybe the Partnership Who Must Not Be Named (PWMNBN) has pulled together enough funds to pay off what they owe. I'm irritated a bit because the Managing Partner didn't use the e-mail address I gave him over a year ago, but that doesn't surprise me considering he rarely pays attention to anything. In any event, I'm willing to overlook that because we're finally getting paid off. After waiting a bit more than six months after our last horse was claimed away, he's going to do what is right. Granted, it is at the expense of someone else, but as far as mark-up goes it's buyer beware. It may not be explicit, but a little math and you can figure it out.
I start to read and realize that this is far from a resolution letter - it's almost a dissolution letter. Please, read for yourselves:
Hello Partners,
As you know we have not been able to secure our line of credit (LOC). Banks are not lending to business with less than 2 years in business, since they do not recognize our previous years in business under the current ownership, it will be sometime still before we can establish an LOC, and that is not guaranteed. We would like to make an offer and take a vote for final payout of this group. The offer is to pay you now 50% of what each share is worth. A majority “Yes” vote will pay out now at 50 cents on the dollar, a “No” vote will leave us at where we stand until if and when we can secure a LOC.
I have racked my brain and spent many a sleepless nights on how to resolve this. At this time I can think of no other way to resolve this quickly and like most of you would like to put this behind us and move forward. Please reply with you vote by August 21st, 2008. I will publish and proceed accordingly to the results.
Really? Did a "pay you 50% now and 50% when we get more money" ever occur to them? Did the idea of making these partners whole just never occur to them? Or did they look at the balance sheet and just figure "the hell with them"?
I'll add that this e-mail went to a blind list and the vote is strictly in the MPs hands so there is no way to make sure that the vote is fair. I only know a few of the partners in OS 1044 so I have no idea how this is going to turn out. I can only 'trust' the guy that has taken a interest free loan out on the backs of trusting partners.
I know he defends himself by declaring that the previous MP misplaced the funds and he is inheriting the mess. I could sympathize if he didn't have almost 10 months to do his due diligence. This is, of course, according to him - he was taking over in name only in early 2007 but not 'officially' until 1/1/08. Who the hell knows what to truly believe anymore?
I've heard from some folks out there who have asked "Contact the licensing board in California. They'd be interested to hear this for sure!" No, they wouldn't. I was politely told that because I was not a licensee that it's not in their jurisdiction and that a financial matter should be handled through the court system. OK. So if you're a CHRB licensee, feel free to cheat your partners if they are out of state. You're free and clear. That may be harsh, but it sure seems to be the case. What's nice is that they took a prosperous group, lied to the partners, made it an unprofitable group and then screwed everyone over so that it's not financially feasible for us to sue them.
Since receiving my e-mail I have discovered that the other groups to which these joker's owe money to received the exact same e-mail. Can someone PLEASE tell me how these yahoos allegedly filled two claiming partnerships at Del Mar in the last two weeks? How in the world is this possible? It irritates the crap out of me, mostly because by their dishonesty they give the rest of us trying to run partnerships the right way a bad name. We all end up getting painted by their brush.
I responded to Big Shot and basically told him I wouldn't vote unless the vote was open and above board. I have not heard back from him, nor do I expect to. Even if I did, I would have no idea what to truly believe anyhow. The inbox is all abuzz with notes flying around from friends and partners. All in true disbelief that after all this time this is the best he could do - and basically flaunting it in front of all of us by spending $70,000 in horses at Del Mar. All I can say to those new partners of theirs is - buyer beware and I wish you had contacted me first...
ADDENDUM (8/13/08)
Come to find out this week, Big Shot is running around Del Mar introducing people to his "banker" in order to show he has backing for the big purchases he's making (and trying to make). Seriously? He allegedly can't get a LOC, but a "banker" is making the rounds with him at Del Mar to line up horse purchases? This gets more warped by the day...
6 comments:
All of us who run small partnerships can easily get in trouble from time to time, especially when some partners don't pay their bills. But we all recognize -- I hope -- that we have to pay our partners what we promised. I know that when I'm a couple of weeks late sending out checks, I start to hear from the partners. If it were many months, the noise would be deafening.
Like Ted, I wish I knew how he got all that money to claim at Del Mar. I've been looking at potential claims at Saratoga and wishing I could fill just one $35,000 partnership. And how, by the way, do you mark up a claiming partnership that much? Looks like there's some secret to the business that I've been missing!
Ted: there is a simple answer here that you ought to know, being a manager yourself. Each limited partnership is an individual partnership. It is stated in the contracts. New partnerships do not assume responsibility for the old. I am in the new partnerships. There are major partners in each of the new partnerships and they put the money in each of the claiming accounts and allowed OS to sell a percentage of each. I was in the racing office when we put in the claim slips.
Actually, 100 percent of Yankee Visionary was sold with in 24 hours, and the buyers are persons like me who know the issues which our manager inherited and is trying to deal with.
I inherited several small limited partnerships in oil, and it is the same situation with those-- accounting for one percent of this well and .02 percent of that well (and different courts for every different county in which wells are located , each requiring an individual affidavit to transfer the ownership.)
Steve-- a claim isn't marked up-- the buy-in includes three months' training fees and 8+ percent California State taxes
I wish you well, Ted, just breathe. I'm still in this, and I'm feeling OK. Thank you for your good thoughts for Milltown Road in the past. He trotted yesterday!
Geri
Geri -
When you collect roughly $60,000 for a $32,000 horse (according to the solicitation email the MP sent out - he said that the 2nd partnership was 100% owned by this group; of course if he was obsfucating that a bit, I'm not surprised) even if you add $4000 a month for expenses - that would be a day rate of $100 and another $1000 for vet and shoeing (WAY high, by the way. My vet bills are about $350, farrier $100 - CAL is not THAT much higher) plus $2500 for taxes, that still leaves at least $12,000 additional that was collected. Sounds like a mark-up to me. That mark-up is pocketed and, quite frankly, he would do that.
I also clearly do not claim that the new partnerships pay for the old, only the management fees that are collected each and every month in addition to the 10% of all purses he collects plus the overages as stated above. There is money, he just doesn't want to pay. Additionally, he knew what he was getting into - he claims to have seen the books months before he took over. Maybe at that point he should have decided aginst assuming this liability - unless, of course, the plan all along was to just blow it off.
He's lied to me since he took over and I don't beleive a word he says. Seriously, he never came up with half now, half later? A payment plan? Anything besides screw you guys?
I dred calling myself an MP when this thief is one.
What is keeping you from naming the partnership and filing some sort of breach of contract suit?
Winston - as for not naming the group, those who have e-mailed me I have told. I don't want to get into casting stones in public but still want to bring an honest representation of what can and does go on out there.
As for not suing...I would love to. The problem with that is for the small percentages involved it makes no sense for a single one of us to sue. Also, none of us really know the other partners so banding together is impossible as well. Combine this with the lack of any kind of action by the CHRB and it's basically a license to steal.
Thanks.
Looks like I need to change the mission statement for my partnership.
Why try to do it the right way when the state condones outright criminal activity. Boy am I dumb.
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