Horse Breeder Trustee Settles Fraud Claims For $27M

Law360, New York (July 25, 2011, 2:45 PM EDT) -- The bankruptcy trustee for Kentucky horse breeder ClassicStar LLC on Friday inked $27 million in settlements with investors accusing the GeoStar Corp. subsidiary of convincing them to claim $500 million in improper tax deductions in a fraudulent mare-leasing scheme.

James D. Lyon, the Chapter 7 trustee for ClassicStar, a thoroughbred horse breeding outfit operated by energy company Geostar Corp., granted five investors unsecured claims against the estate totaling $27 million in order to resolve fraud and racketeering allegations.

The settlements finalize a truce the trustee reached...
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