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Originally Posted by tbwinner
These are all great questions and I will attempt to answer what I think here:
We need an LLC or partnership manager. I recommend the LLC format due to the fact of liability protection and having the integrity of being a "business entity". This will be the one responsible for the financial matters and the contact person for the trainer (trainer won't want to talk to 10 partners 2-3x a week about the same horse).
A conservative estimate is the best to use for the initial capital as to avoid any future cash calls. The amount for the claim plus 4 months training expenses ($10-$12k depending where we go) is a conservative estimate.
Managing partner will have final say. Since this is a group PA effort we will all collaborate on spots to race in, what level, along with input from the trainer.
Owners with 5% or greater ownership need to be licensed. In NY it is 3% I believe. We should limit ownership to less than 5% (like 4.75% shares) as to avoid licensing issues.
If a partner wants out, other partners can "bid" to buy their stake.
Purses will be distributed once there is the 4 month training expense "reserve" in the bank as to avoid cash calls.
Anyone think this sound like a good basis?
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As a general manager for a horse racing operation, this is, imo, a great way to start and very well thought out. One person making the decisions, the 4 month reserve should be perfect, I wouldn't go any less. You should also have a separate checking account set up specifically for the LLC.
For what it is worth, I wouldn't race in Florida at all. I would definiately consider claiming out of Florida, but I would then send the horse straight to Philly Park. We have three horses there and hoping to get more in the near future. Purses are great for the quality you are up against.
