THOROUGHBRED RACING : Calumet Left With Egg on Face

A San Francisco investor with an interest in buying cash-drained Calumet Farm in Lexington, Ky., said that it will be difficult for any buyer to take over the farm because of its tangled finances.

“To unscramble that egg would be a colossal achievement,” said Ron Volkman, who is a member of a group that had considered buying Calumet long before the legendary farm filed two bankruptcy petitions Thursday in Lexington.

Calumet, which produced eight Kentucky Derby winners--including Triple Crown champions Whirlaway and Citation--from 1941 through ‘68, has liabilities of about $135 million and undetermined assets. The 869-acre farm needed a court-approved loan of $350,000 to continue operating.

The son of a former Hollywood Park track superintendent, Volkman raced Wild Again in partnership with William Allen and Terry Beall. In 1984, the three paid $360,000 to make Wild Again eligible for the Breeders’ Cup Classic at Hollywood, and the 31-1 shot won racing’s first $3-million race. Volkman said Wild Again’s owners collected more than their $1.35-million share of the purse through bets on their horse.

Volkman, 53, declined to identify other members of the group that has been interested in Calumet, but said they did not include Allen or Beall. Volkman doesn’t own breeding shares in Wild Again, who has been one of this year’s leading stallions, with his progeny earning nearly $2 million.

This spring, Allen and Beall, who control 50% of Wild Again, attempted to buy Calumet’s 50% interest in the stallion, but their offer was rejected.

“It’s regrettable what’s happened to Calumet,” Volkman said. “The problem for anybody who buys the farm is that they’ll have to deal with the creditors, and the banks in the picture are going to go for the jugular.”

According to court papers filed Thursday, Calumet has 84 creditors. Among them is the Wayne Lukas Racing Stable, which says that Calumet owes it $2.6 million. Lukas trained Calumet’s Criminal Type, who was voted horse of the year in 1990 and recently finished his first stud season at the farm.

Ron Sladon, secretary-treasurer of Calumet who was brought in as part of a new management team after J.T. Lundy, the farm president, resigned in April, agreed with Volkman about Calumet’s problems. John Ward, who replaced Lundy, said it took his staff 10 days to sort out the paper work after they arrived.

“Every day, there was a new revelation,” Sladon said. “The (debt) numbers just kept getting bigger and bigger. Right now, it’s hard to say who would want to buy this caldron. The record-keeping has been very poor.”

Attempts to reach Lundy were unsuccessful.

Volkman estimated that the Calumet real estate might be worth $32 million. “It’s the best land in the United States for raising horses,” he said. “You can’t appraise the land for anything but a farm, because they’ll never let it be rezoned for anything else. The ones who are in good shape right now are the banks that hold the mortgages. At least they’ve got that land.”

In the last five years, Calumet took out mortgages totaling $65 million.

Sladon said Calumet Farm was appraised two years ago, but he declined to disclose the results. “I’m dubious about anything I found before we came in here,” he said.

Calumet’s premier stallion, Alydar, had to be destroyed after a stall accident in November, and Volkman questions the value of the stallions that remain at the farm.

“You’ve got Wild Again, which Calumet owns 50% of,” Volkman said. “You’ve got Criminal Type, who’s unproven. There’s Secreto, who might be a nice sire if he’s managed properly. And then there’s Affirmed, who’s never done much.

“Another risk for a new owner is that you don’t know the handshake deals that you might be responsible for later.”