Horse racing investors face multimillion insolvency losses
Members of a horse racing syndicate, Layezy Racing Owners Club, whose owner has been declared bankrupt face losing millions of pounds, because the insolvency means the horses are not able to run under the regulations of the racing industry’s ruling body
17 May 2019
In February 2019 Michael Stanley, the owner of racehorses through Layezy Racing Owners Club was declared bankrupt. Stanley, a former police officer, attracted investors to the syndicate who paid over funds in exchange for a share of winnings in races in which the horses ran.
Philip Duffy and Allan Graham of corporate restructuring and debt advisory firm Duff & Phelps were appointed as his trustees in bankruptcy immediately in February.
In the latest development the Insolvency Service has now confirmed that on 8 May the following companies - Layezy Ltd, Layezy Racing Ltd, Number 1 Guide Ltd and Stanley Property Services Ltd - were subject to winding up orders and were put into compulsory liquidation. Duffy and Graham of Duff & Phelps were appointed as joint liquidators.
At the time of the initial decision to file for bankruptcy, a statement from Duff & Phelps said: ‘Following an analysis of the syndicate's financial position, Michael Stanley, the operator of the syndicate, has taken the decision to file for bankruptcy.
‘We are liaising with the Official Receiver regarding the next steps. We have advised the Insolvency Service of the urgency of the situation, so the process of agreeing investor claims and ultimately distributing funds to investors can start as soon as possible. We are unable to discuss potential returns to investors yet.'
A spokesperson for the British Horse Racing Authority (BHA) said: ‘The BHA was alerted to the fact that Mike Stanley, owner of 23 horses through the Layezy Racing Owners Club, declared himself insolvent on Monday 11 February. Under the Rules of Racing, insolvent individuals or entities are not permitted to own and run racehorses. As such, those horses will not be allowed to run until further notice.
‘The BHA is contacting the trainers responsible for the relevant horses to ensure they are sufficiently informed about the current situation and what support is available to them, and will work with the trainers to ensure the horses continue to receive the first class care they are accustomed to in their yards. This is a complex situation and the BHA is working with the relevant authorities to assist in any way it can.’
According to posts on social media, members of the syndicate allege that Stanley had not been placing their bets for some time and there is now a shortfall which estimates indicate could be between £20m and as much as £70m.