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Firm Flashbacks

The multimillion-dollar plow horse?

The lawyers from the established, well-known New York law firm who represented Chase Manhattan Bank should have left well enough alone. But instead, they pushed.

They probably assumed they could bully the bank’s customer, along with the customer’s much smaller law firm from Oklahoma, into caving. They were wrong.

Sometime during the oil boom, a successful McAfee & Taft client who had made his fortune in the oil and gas business purchased a horse farm in Lexington, Kentucky, the Horse Capital of the World. If you’re picturing acres and acres of rolling hills of Kentucky bluegrass and white picket fences, well, that’s exactly what it looked like. The oilman then set his sights on purchasing a bay Thoroughbred colt sired by Northern Dancer, the winner of the 1964 Kentucky Derby and one of the most successful breeding stallions of the 20th century. The colt had been racing in Europe at the time and hadn’t lost a single race. After being purchased, the racehorse was transported to the United States, where he was put out to stud at the newly acquired Lexington horse farm.

Several years later, energy prices dropped dramatically, the oilman faced crippling debt, and the bank came to seize the property for which it had loaned the money — namely, the picturesque horse farm and the prized racehorse-turned-stud. The problem was, the bank had no lien on, or security interest in, the horse. Notwithstanding, the bank was offered the farm and the horse to cancel the debt, which was in excess of the value of both assets at the time.

The bank wasn’t satisfied and pushed for more. The oilman’s lawyer, McAfee & Taft attorney Gary Fuller, pushed back — not harder, but smarter. While conducting some research, he found something he could use to “wire around the problem”: Oklahoma law allowed certain assets to be exempt from creditors. One exempt asset specified in the law at the time? A plow horse.

Image of plow horse

Fuller called the bank’s big city lawyers and said, “I tell you what I’m going to do if you don’t agree to this settlement. I’m going to send a truck to Lexington, Kentucky, and I’m going to put the horse in a trailer.”

Once in the trailer, the plan was to take the stallion to the client’s family-owned 60-acre farm located north of Oklahoma City.

Fuller then proceeded to tell the bank’s lawyers, “I’m going to hook the horse up to a plow, and we’re going to put him to work on that farm. We’re going to use him to plow the fields. I’ll send you some pictures of it.”

According to Fuller, the New York lawyer went crazy, claiming “You can’t do that!”

Fuller responded, “You can come to Oklahoma City and litigate that before an Oklahoma judge and an Oklahoma jury. And you know, maybe they’ll agree with you; maybe they won’t. But a plow horse is exempt. So what’s a plow horse? A horse that plows. That’s all I have. It’s just that simple.”

The bank and its lawyers backed down, took the assets offered, and walked away.