Last February, J.T. Lundy, the president of Calumet Farm, was in San Francisco, receiving 1990 Eclipse Awards for being the best breeder and for Criminal Type, the Horse of the Year.
Two months later, Lundy resigned as president, and yesterday, after a succession of stories in the racing trade press about clients suing Calumet, the historic farm filed two Chapter 11 bankruptcy petitions in Lexington, Ky., listing debts of about $135 million.
John Ward, who replaced Lundy as president of Calumet, said the 869-acre farm is for sale and added: "We needed protection from the courts so that we could go on and do business."
A Kentucky judge gave Calumet permission to borrow $350,000 in operating funds from a Texas bank, using four horses as collateral.
Calumet, with its devil's-red-and-blue silks showing up in winner's circles across the country, won the Kentucky Derby eight times, starting with Whirlaway in 1941. The farm dominated racing for about 20 years, also winning the Derby with Pensive, Citation, Ponder, Hill Gail,Iron Liege, Tim Tam and Forward Pass. Whirlaway and Citation added victories in the Preakness and Belmont Stakes, sweeping the Triple Crown.
Calumet also bred Strike the Gold, this year's Derby winner, but he was a sign of the farm's decline, having been sold to three New Yorkers the year before in a seven-horse package for $3 million.
In recent years, Calumet could no longer afford the luxury of just racing all its horses.
Since 1986, Calumet had taken mortgages on the farm totaling $65 million, and in recent months creditors had filed suit asking for payment of $27 million in debts.
"We had no cash to operate," Ward said yesterday.
In effect, when Alydar died, Calumet started to go with him.