Stites & Harbison, PLLC

Stites & Harbison counsels and assists racehorse interests worldwide with all types of matters relating to the equine and racing industry. Members of the equine practice include: a founder, member of the Board of Directors and president of the American College of Equine Attorneys; a chair of the Kentucky Bar Association's Equine Law Section; and counsel to the Hearing Committee of the United States Equestrian Federation.

The firm's Lexington, Kentucky, office is located in the heart of the Bluegrass—the home of the Thoroughbred.

Stites & Harbison's equine clients

The firm's team of equine and corporate lawyers has represented commercial breeding operations, racehorse owners, trainers and patrons, breeding farm owners, consignors, and racetrack and sales company owners. The firm has also handled equine-lending matters for banks, represented computer companies specializing in software and informational research for the equine industry, and represented veterinarian groups.

The firm has also represented securities broker-dealers who organize and sell limited partnership and other interests in equine-related securities, stallion syndicates and syndicate managers, advertising agencies, video production companies, magazine publishers and auction companies with their equine-related businesses. Stites & Harbison's equine clients come not only from the Bluegrass but also from California, Florida, Texas, Ohio, Pennsylvania and New York. In addition to its Thoroughbred clients, the firm represents a number of clients in the Standardbred, Quarterhorse, Arabian and sporthorse industries.

The firm's equine representations

Stites & Harbison is a leading law firm in Kentucky for sophisticated transactions, difficult litigation and complex regulatory issues. The firm's equine work reflects this capability. The firm is regularly involved in complex equine transactions, including stallion syndications and the purchase and sale of stallion prospects, stallion shares and seasons, mares, yearlings and other equine assets both domestically and internationally.

The firm's lawyers have also handled the syndication of stallions for breeding purposes, represented banks in negotiating and documenting loan transactions involving equine collateral or farm collateral, and assisted in the acquisition and conservation of horse farms. Stites & Harbison's lawyers have provided negotiation and documentation for foal-sharing, mare-sharing, joint ventures, employment matters and other contractual agreements. Its lawyers have provided representation on sales tax and other tax issues in equine acquisitions or operations and for securities offerings of limited partnership interests or stock in equine operations. Finally, the firm's equine team has represented clients before stewards, racing commissions, Jockey Clubs and other panels, has litigated sales and other disputes, and has prepared a wide variety of sophisticated contractual agreements.

The firm's international equine experience

Stites & Harbison's equine practice extends far beyond Kentucky's borders. The firm's lawyers regularly represent Kentucky horse interests overseas and international horse interests in Kentucky.

The firm's lawyers have often published on the international aspects of equine law, including several papers delivered to the annual equine law conference sponsored by the University of Kentucky.

In one of the firm's high-profile transactions, Stites & Harbison's lawyers represented Japan's leading breeder and stud farm owner in the acquisition of Sunday Silence for a reported $11 million from an English owner for the purpose of relocating the horse to Japan for stud duties. The firm's lawyers have also handled equine matters in England, France, Ireland and Canada. The firm also serves as United States Counsel to the European Breeders Fund.

Recent representations

Here are a few recent examples of the firm's equine and related corporate representations:

• Served since 1991 as Corporate Counsel to a prominent Bluegrass farm in a variety of matters relating to the farm's bankruptcy, including domestic and international sales of mares and stallions, the preparation and negotiation of contracts, and the liquidation of real and personal property and subsidiary investments.
• Represented a prominent industry trade publication since 1994, including organization of a new entity, the purchase of assets, general corporate and real estate matters, and mergers and acquisitions.
• Served as Corporate Counsel to a horse-racing breeders association on a wide variety of corporate matters, including mergers and acquisitions, corporate financing, the defense of a hostile take-over attempt, preparation and documentation of stock offerings, representation before the Kentucky Racing Commission, litigation, property tax and employment matters and the development of employee benefit plans.

Stites & Harbison's equine clients include Gainesway Farm, Darby Dan Farm and Crestwood Farm.

The firm's equine-related services

In addition to providing legal services specific to equine entities, the firm's lawyers have handled matters in other corporate law areas which relate strongly to the current and future needs of the Thoroughbred racing industry. What follows is a brief overview of these equine-related corporate services:

• Gaming. The firm's lawyers have researched and analyzed the economic and legal aspects of "simulcast," including rights granted by state statute, as well as alternative forms of gaming. The firm also represents clients with various gaming interests, including pari-mutuel wagering, Indian casino gaming and Internet gaming. It has represented these clients in the acquisition of a racetrack, approval by Racing and Wagering Boards and in applications before the National Indian Gaming Commission.
• Mergers and acquisitions. Stites & Harbison's team of attorneys has handled nearly 100 transactions for two large, publicly-held companies. Stites & Harbison's acquisition lawyers represent public and private buyers and sellers in a variety of acquisitions, corporate dispositions and leveraged buyout transactions. The firm currently acts as national acquisition counsel for a publicly-traded provider of temporary staffing and for a business consolidator in the vinyl replacement window industry.

The mergers and acquisitions group counsels clients concerning the legal aspects of issues such as structuring the transaction to take advantage of either pooling or purchase accounting; the use of earn-outs and other contingent compensation; the pros and cons of golden parachute, golden handcuff and other similar executive compensation arrangements; and the tax impact of various acquisition structuring techniques.

• State and local tax issues. Stites & Harbison's attorneys appear regularly before the Kentucky Department of Revenue, the Board of Tax Appeals and the Kentucky appellate courts in ad valorem, sales and use tax, and state income taxation matters. The firm served as counsel to the taxpayer in a national precedent-setting case involving the right of a unitary, multi-corporate group to file a combined state tax return. Also, the firm has succeeded in overturning two unconstitutional Kentucky tax statutes, resulting in multi-million dollar recoveries for taxpayers.
• Television production rights. The firm has represented a broadcast producer in the negotiation of television production contracts.
• Television network start-up. The firm has assisted with the legal aspects of the creation of a full-time, international television network.
• Trade associations. The firm's lawyers have provided a variety of tax, legislative and other services to trade and manufacturers associations and groups, including the American Horseshow Association, Inc.