CM’s response to ASHA.

  CM's Response to ASHA (11.6 KiB, 1,135 hits)

The ASHA filed a motion asking the Fayette Circuit Court to stay any enforcement of its order pending the appeal.  The motion is set to be heard this Friday.  A copy of the motion is attached.

  ASHAs_Motion_for_Stay_Pending_Appeal.pdf (793.8 KiB, 954 hits)

ASHA’s statements and Concerned Members’ Responses

  Message from ASHA President (117.7 KiB, 903 hits)

  Response to 12-22-10 Message from ASHA President (14.4 KiB, 914 hits)

  2-3-11 ASHA Statement (58.6 KiB, 936 hits)

  Response to 2-3-2011 ASHA Press Release (13.5 KiB, 925 hits)

ASHA Board continues its efforts to prevent members from reviewing corporate records; the board decided to appeal the decision of the Fayette Circuit Court.

  Notice Of Appeal (21.8 KiB, 1,615 hits)

The Final Judgment and Order incorporates the December 2, 2010 order, by reference, and confirms that the Members are entitled to inspect and copy all of the ASHA’s corporate records.  Although the ASHA had requested the Court to provide it with a 30 day grace period to comply with the Court’s ruling, the Final Judgment and Order does not provide the ASHA with a 30 day grace period.

  Final Order and Judgement (217.1 KiB, 957 hits)

Message From Concerned ASHA Members

On December 22, 2010, the President of the ASHA, Judith Werner, distributed her
message about the lawsuit the ASHA filed against a few of its Members. Her message is
not accurate, and it conflicts with the law governing non-profit organizations in
Kentucky. In short, the ASHA refuses to allow its Members to inspect corporate records
relating to expenses ranging from a few hundred dollars to several hundred thousand
dollars. On December 2, 2010, a Court ruled that the ASHA’s decision to withhold those
corporate records from its Members violates the law. Nonetheless, the ASHA has still
not produced those records and is considering spending more money and time by asking
yet another Court to interpret the same, clearly worded law.

Ms. Werner contends that the Members have refused to articulate their concerns and
reasons for asking to see the corporate records. That is simply not true, and it is troubling that Ms. Werner is misleading ASHA members on this issue. The Members described their concerns in detail in their initial letter requesting to inspect specific corporate records relating to large corporate expenses. That letter, dated April 20, 2009, is available for review on www.saddlebredcentral.com (along with other documents containing the arguments made by both sides and the Court’s ruling in favor of the Members). Furthermore, in February of 2009, an auditor identified “significant deficiencies” in the ASHA’s financial policies. Since the ASHA has an annual budget of approximately $2 Million, it should be no surprise that its Members would expect the organization to have appropriate financial oversight.

Shamefully, Ms. Werner argues that the ASHA has limited resources and the requests
made by the Members have strained the ASHA. To be clear, it is the ASHA who could
have simply opened its doors and allowed the Members to review the corporate records
they requested (and have a right to inspect under the law). That would have been the
most efficient and appropriate response. Instead, the ASHA opted to file a lawsuit
requiring the ASHA and the Members to expend time and resources litigating the
interpretation of a clearly worded law.

Please go to www.saddlebredcentral.com to review court records and related documents in detail. As you will see, the Court agreed that the law is clear that non-profit
organizations must operate with transparency by allowing members to inspect the
corporate records to ensure that all of its revenues and assets are used appropriately. If
you agree that the ASHA should stop hiding corporate records from its members, please
contact the ASHA Board and let them know that you do not approve of any further
attempts to avoid complying with the law.

Concerned Members
Edward “Hoppy” Bennett
Tom Ferrebee
Carl Fischer, Jr.
Dr. Simon Fredricks
Kris Knight
Lynn Via

  Message From ASHA Members (14.4 KiB, 888 hits)

Attached is a copy of the Members’ Reply in Opposition to the Proposed Final Judgment Tendered by the ASHA. It was filed with the Court and served on the ASHA on 27th Dec. 2010.

  Members Reply in Opposition (29.2 KiB, 1,099 hits)

ASHA Response filed with the Fayette Circuit Court on 27th Dec. 2011.

  ASHA Response (180.7 KiB, 1,028 hits)

On December 17, 2010, the Members filed a proposed final judgment with the Court. On December 21, 2010, the Members received a proposed final judgment tendered by ASHA. Attached is a document filed on December 21, 2010 on behalf of the Members objecting to the language proposed by ASHA in the judgment it tendered to the Court.

  Members Opposition to Proposed Order (107.4 KiB, 977 hits)

Proposed Order tendered to the Court by the Members on December 17th, 2010.

  Proposed Order tendered to the Court (21.8 KiB, 1,072 hits)

The below document was filed December 15th, 2010.

Document is Defendants response to ASHA’s motion regarding appeal.

  Defendants Response (26.2 KiB, 1,042 hits)

Attached is a copy of the ASHA’s motion to dismiss as moot the members’ counterclaims for breach of contract and promissory estoppel because the Court ruled in favor of the members with respect to the interpretation of KRS 273.233.  The ASHA advises the Court that it will appeal the Court’s decision that the members are entitled to inspect ASHA’s corporate records.  The document was filed on Friday, December 10, 2010.

  ASHAs Motion to Dismiss Counts II and III (58.5 KiB, 1,205 hits)

The ASHA sued to prevent its members from inspecting ASHA’s corporate records, but the Court rejected the ASHA’s arguments and declared that Kentucky law entitles the members to inspect and copy the corporate records.

The purpose of this website is to inform the general membership of the lawsuit the American Saddlebred Horse Association brought upon the “Concerned Members.”  Below are all legal documents and briefs connected to this lawsuit.  The information contained on this website will assist you in forming your own opinion of these proceedings.  This site will be kept updated with any new documents that may be submitted to the court regarding this matter.

Attached are copies of:

(1) the Court’s Opinion, Order and Judgment; dated December 2nd, 2010;

  Court Decision (97.0 KiB, 4,752 hits)

(2) the Complaint filed by the ASHA initiating this lawsuit against certain senior members; dated October 6th, 2009;

  ASHA Complaint (1.1 MiB, 5,319 hits)

(3) the Answer and Counterclaim filed on the members’ behalf; dated August 25th, 2009;

  ASHA Members Answers (1.4 MiB, 5,421 hits)

(4) ASHA’s Motion for Summary Judgment; dated April 15, 2010;

  ASHAs Motion (2.0 MiB, 4,556 hits)

(5) the Members’ Motion for Summary Judgment; dated May 14th, 2010;

  Members Motions (1.4 MiB, 4,680 hits)

(6) ASHA’s Reply Brief; dated June 1st, 2010;

  ASHAs Reply (137.5 KiB, 4,362 hits)

(7) the Members’ Reply Brief; dated June 15th, 2010;

  Members Reply (64.5 KiB, 4,963 hits)

American Saddlebred Horse Association, Inc.

Dear ASHA Directors:

We are senior members in good standing of the American Saddlebred Horse Association, Inc. (“ASHA”). We have become increasingly concerned about the decline in popularity of the American Saddlebred horse in recent years. Since 2005, there has been a steady decrease in the total number of registered Saddlebred horses. The erosion of popularity of our breed is further evidenced by steadily declining attendance over the past decade at the World’s Championship, our industry’s signature event.

As you know, one of the primary purposes of the ASHA is to stimulate and promote interest with respect to the history, breeding, exhibiting, and improvement of the American Saddlebred. As concerned members of the ASHA, we want to be sure that the ASHA is utilizing its assets in a prudent manner, and in furtherance of the purposes of the ASHA.

After request, the ASHA provided copies of tax returns and certain related financial reports of the ASHA for calendar years 2006 and 2007. After our initial review, these reports seem to indicate that the ASHA has expended significant sums on items for which we are unable to determine what benefit, if any, the ASHA received in return. Those expenditures range from a few thousand dollars to more than $400,000. Furthermore, none of the financial reports identify the recipients of these disbursements. We believe it is important for the members of the ASHA to be provided with more detailed information about the expenditures of the ASHA, and we are therefore enclosing a list of questions related to certain expenses as to which we would appreciate receiving additional information.

Included in the enclosed list is our request for a copy of the “employment agreement and deferred compensation package” for Alan Balch, the Executive Secretary of the ASHA. According to the ASHA Financial Statements prepared by Bennett & Company CPAs for the year ended December 31, 2007 (“2007 Statements”), the ASHA approved “an employment agreement and deferred compensation package” with Alan F. Balch on October 31, 2007. The 2007 Statements indicate that the compensation agreement with Mr. Balch was given retroactive effect beginning November 1, 2006. The IRS Form 990 filed on behalf of the ASHA for the year 2007 indicates that Mr. Balch’s base salary increased to $100,000, but the financial records we received fail to disclose the additional benefits that Mr. Balch is entitled to receive, in addition to his salary, as part of his “deferred compensation package.” As members of the ASHA, we respectfully request a copy of Mr. Balch’s “employment agreement and deferred compensation package” so that we may determine the total compensation and benefits that Mr. Balch is entitled to receive from the ASHA while key barometers of the Saddlebred industry are falling. We also want to determine if any deferred compensation owed to Mr. Balch poses a substantial off- balance sheet expense which will become due for payment in future years. In today’s challenging economic environment, and in light of the particular decline in our industry, we want to be certain that the ASHA has not entered into any agreements that might not be in the best interest of the ASHA.

We are confident that you respect the fiduciary responsibilities that you, as Directors, have to the ASHA and its members, including your oversight of the budget and expenditures of the ASHA. We look forward to receiving the information we have requested from you at your earliest convenience. Please provide your response to us by delivering the same to Stoll Keenon Ogden, PLLC, c/o Stephen A. Houston, 2000 PNC Plaza, 500 West Jefferson Street, Louisville, KY 40202.

This request is being submitted by the signatories to this letter, indicated below, as well as the individuals listed on the next page who have authorized us to include their names in this request.

AMERICAN SADDLEBRED HORSE ASSOCIATION, INC.

1. Provide a copy of the employment agreement and deferred compensation package entered on October 31, 2007 between ASHA, Inc. and Alan F. Balch, as identified in the Financial Statements prepared by Bennett & Company CPAs for the year ended December 31, 2007 (“2007 Financial Statements”).
2. Identify the individuals who voted to approve the agreement and deferred compensation package described in number 1 above.
3. Identify the individuals who voted against the agreement and deferred compensation package described in number 1 above.
4. Identify each individual and entity who received any portion of the “professional fees” totaling $16,400 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
5. Identify each individual and entity who received any portion of the “professional fees” totaling $15,650 in 2006 listed in the Financial Statements prepared by Bennett & Company CPAs for the year ended December 31, 2006 (“2006 Financial Statements”), and identify the specific purpose for those expenditures.
6. Identify each individual and entity who received any portion of the expenditures for “meetings/conferences” totaling $222,166 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
7. Identify each individual and entity who received any portion of the expenditures for “meetings/conferences” totaling $159,865 in 2006 listed in the 2006 Financial Statements, and identify the specific purpose for those expenditures.
8. Identify each individual and entity who received any portion of the expenditures for “printing” totaling $200,796 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
9. Identify each individual and entity who received any portion of the expenditures for “printing” totaling $180,497 in 2006 listed in the 2006 Financial Statements, and identify the specific purpose for those expenditures.
10. Identify each individual and entity who received any portion of the expenditures for “commissions” totaling $29,369 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
11. Identify each individual and entity who received any portion of the expenditures for “commissions” totaling $26,105 in 2006 listed in the 2006 Financial Statements, and identify the specific purpose for those expenditures.
12. Identify each individual and entity who received any portion of the expenditures for “contract fee” totaling $9,600 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
13. Identify each individual and entity who received any portion of the expenditures for “contract fee” totaling $78,443 in 2006 listed in the 2006 Financial Statements, and identify the specific purpose for those expenditures.
14. Identify each individual and entity who received any portion of the expenditures for “advertising/promotion” totaling $13,523 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
15. Identify each individual and entity who received any portion of the expenditures for “advertising/promotion” totaling $63,287 in 2006 listed in the 2006 Financial Statements, and identify the specific purpose for those expenditures.
16. Identify each individual and entity who received any portion of the expenditures for “bank fees” totaling $19,442 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
17. Identify each individual and entity who received any portion of the expenditures for “bank fees” totaling $13,214 in 2006 listed in the 2006 Financial Statements, and identify the specific purpose for those expenditures.
18. Identify each individual and entity who received any portion of the expenditures for “interest expense” totaling $26,179 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
19. Identify each individual and entity who received any portion of the expenditures for “interest expense” totaling $32,949 in 2006 listed in the 2006 Financial Statements, and identify the specific purpose for those expenditures.
20. Identify each individual and entity who received any portion of the expenditures for “Market Research” performed in 2007 for a total cost of $12,796 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures. Provide a copy of any document indicating the results of that research.
21. Identify each individual and entity who received any portion of the expenditures for “Market Research” performed in 2006 for a total cost of $38,721 listed in the 2006 Financial Statements, and identify the specific purpose for those expenditures. Provide a copy of any document indicating the results of that research.
22. Identify each individual and entity who received any portion of the expenditures for “web page/email” totaling $20,136 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
23. Identify each individual and entity who received any portion of the expenditures for “web page/email” totaling $4,267 in 2006 listed in the 2006 Financial Statements, and identify the specific purpose for those expenditures.
24. Identify each individual and entity who received any portion of the expenditures for the “Comm. and Publications” portion of “salaries” in 2007 totaling $90,157 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
25. Identify each individual and entity who received any portion of the expenditures for the “advancement” portion of the “salaries” totaling $77,428 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
26. Identify each individual and entity who received any portion of the expenditures for the “administration” portion of the “salaries” totaling $413,691 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
27. Identify each individual and entity who received any portion of the expenditures for the “Comm. and Publications” portion of “benefits” in 2007 totaling $12,530 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
28. Identify each individual and entity who received any portion of the expenditures for the “advancement” portion of the “benefits” totaling $9,758 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.
29. Identify each individual and entity who received any portion of the expenditures for the “administration” portion of the “benefits” totaling $66,990 in 2007 listed in the 2007 Financial Statements, and identify the specific purpose for those expenditures.

Download the full document

  04-20-09 ASHA Final-2.pdf (139.1 KiB, 1,572 hits)