The minority owners of reigning Horse of the Year Curlin have been permanently disbarred by the Kentucky Supreme Court for their handling of a $200 million diet-drug settlement.
The high court on Thursday granted requests by William Gallion and Shirley Cunningham Jr. to ban them from practicing law in the state again.
Gallion and Cunningham made the requests to be permanently disbarred separately. Both were charged with 22 violations of the Kentucky Supreme Court rules for their handling of the settlement.
The two men face a federal trial in Frankfort in February on wire fraud charges. Prosecutors say they conspired to bilk clients out of $94 million in a settlement over the diet-drug fen-phen.
A previous trial ended in July with a hung jury. A third attorney, Melbourne Mills of Lexington, was acquitted.
The separate eight-page orders detail a series of financial maneuvers made by Gallion, Cunningham and Mills that resulted in the attorneys keeping $104.3 million of the settlement.
Gallion's law firm and Cunningham each took in more than $50 million from the settlement, the Supreme Court's order said.
The two orders also accuse both men of mishandling money by putting it in personal accounts, failing to notify their clients of details of the settlement and failing to supervise subordinates who dealt with clients.
The two purchased Curlin, America's richest racehorse, for $57,000 in 2005 through their Midnight Cry Stables. A judge has ordered the minority share be sold to help satisfy a $42 million civil judgment against Gallion and Cunningham. The judgment stems from a civil suit brought by about 400 former clients of the two attorneys.
The 80 percent majority interest in Curlin, held by Jess Jackson, isn't affected by the pending sale.
Curlin will attempt to defend his title in the Breeders' Cup Classic on Oct. 25. The horse recently passed Cigar by reaching $10.2 million in lifetime earnings in just two years on the track.
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