Frank Stronach Sues Daughter Belinda for Mismanagement

Just less than two years after Belinda Stronach succeeded her father, Frank, at the helm of the privately ownedracetrack company The Stronach Group, that transition has unraveled.

On Oct. 10, a story published by Thoroughbred Daily News and also by the Toronto Star reported that Frank Stronach, 86, and his wife, Elfriede, have filed a lawsuit in Ontario (Canada) Superior Court against his daughter and others alleging mismanagement of assets and trust funds. Others named in the $520 million lawsuit include Stronach Group CEO Alon Ossip and Frank Stronach's grandchildren Nicole and Frank Walker.

According to the Star's report, plaintiffs Frank and Elfriede Stronachallege their daughter and Ossip undertook "a series of covert and unlawful actions" contrary to the best interest of other members of the Stronach family. The statements of claim allege Belinda Stronach, 52, led an extravagant lifestyle that has drained the company of more than $70 million, including a new office that cost more than $10 million in the Toronto neighborhood Yorkville.

The Star reports that in a statement issued through their lawyer, Frank and Elfriede Stronach filed litigation as a last resort after considerable efforts for almost two years to resolve matters on a consensual basis.

Ossip, through a spokesperson, told BloodHorsethe allegations are baseless and not grounded in fact or reality. Ossip suggested Frank Stronach's actions have put the family's wealth in peril.

"Alon has always honored his obligations and acted in good faith to preserve and grow the Stronach family's assets and to protect the interests of all members of the family," the spokesperson said. "Alon created huge wealth for the family, and he has always operated in a prudent and commercially sensible manner.

"Frank Stronach was a great auto parts entrepreneur, but his recent excessive spending and numerous failed ventures put his family's wealth at risk.

"This is a dispute between Stronach family members that should be resolved between family members."

The lawsuit's outcome could have a major impact on horse racing. The Stronach Group owns such gems asGulfstream Park,Santa Anita Park, and the Maryland Jockey Club'sPimlico RacecourseandLaurel Park, along with smaller tracks likeGolden Gate FieldsandPortland Meadows. In Florida, The Stronach Group also owns the Palm Meadows training center.

Outside of its tracks, The Stronach Group owns and operates advance-deposit wagering site Xpressbet.com, tote provider AmTote International, and simulcast sales agent Monarch Content Management.

Frank Stronach, founder of The Stronach Group and the company's honorary chairman, has enjoyed extensive success in racing and breeding. He has earned four Eclipse Awards as leading owner and eight as leading breeder (either in his name or his Adena Springs operation), as well as numerous Sovereign Awards in these categories in Canada.

In November 2016, Belinda Stronach was formally introduced as the new chairwoman of The Stronach Group. At that time, she said she viewed the company as an "entertainment company first and foremost, with horse racing and wagering as our key assets." She said the company would work to expand horse racing and deliver amazing entertainment experiences, calling the Pegasus World Cup Invitational at Gulfstream a "game-changing catalyst."

Frank Stronach had served as chairman of Magna Entertainment Corp., which included many of the same assets. That company filed for Chapter 11 bankruptcy in March 2009 after mounting debt reached hundreds of millions of dollars.

Answer the following questions:

1) What are the four obligations Belinda owes to Frank in her capacity at this company?

2) What is Frank alleging that Belinda did to breach any of these obligations?