The Jockeys’ Guild and its one-time head have settled a long-running legal dispute, removing one of the last obstacles to the organization closing its bankruptcy proceedings.
The settlement filed Friday between the Nicholasville, Ky.-based group and former CEO Wayne Gertmenian calls for the two parties to split $104,000 being held by a state court in California.
The Guild filed for bankruptcy protection Oct. 12, 2007 in Louisville due to financial problems from its health insurance plan, litigation and decreased payments from racetrack associations.
Gertmenian was fired in November 2005 after a Congressional inquiry determined he allowed jockeys’ on-track insurance policy to lapse without properly informing them. The Guild, which represents about 1,200 jockeys, sued Gertmenian, claiming he took more than $1 million from the organization, sparking two other lawsuits that will be dropped as part of the agreement.
Under the terms of the settlement, awaiting approval from U.S. Bankruptcy Judge David Stosberg, the Guild would receive $57,200 of the disputed money; Gertmenian would get $46,800.
Lea Goff, an attorney for the Guild, said the settlement isn’t expected to cost the organization anything. Gertmenian’s attorney in Los Angeles, David C. Read, did not immediately return a phone call and e-mail Friday.
The Jockeys’ Guild has had financial troubles dating back to at least 2005.
During the bankruptcy proceedings, the Guild revealed that it has slightly more assets than liabilities. The organization projected in November a working monthly deficit of nearly $120,000.
At the time of the bankruptcy filing, current Guild national manager Terry Meyocks cited the rising cost of health insurance and the cost of fighting litigation against the Guild as the factors that prompted it to seek bankruptcy protection so it could reorganize.
In December, Stosberg approved a plan that would allow the Guild to emerge from bankruptcy. The settlement with Gertmenian was part of that plan.
Also, as part of the plan, the Guild has notified jockeys that it will no longer continue to provide health insurance because it was not economically feasible. The Guild will still provide disability and life insurance and continue to be an advocate for jockeys on health and safety issues.
In its most recent quarterly filing, dated June 1, the Guild told Stosberg it had $49,087 cash on hand and should be able to file a final decree to emerge from bankruptcy in the coming months.
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