By T. D. Thornton
Seven of the 11 directors of the Pennsylvania Thoroughbred Horsemen's Association (PTHA) filed a legal response Monday that denied sweeping allegations of corruption and cronyism that were made last month by the PTHA's current president and another board member.
Facing a petition in the Court of Common Pleas of Bucks County, Pennsylvania, that seeks to use a state business corporations law to remove those seven directors from the PTHA board, the respondents stated in their Oct. 21 filing that the petition should be denied “because it is both legally and factually deficient.”
Back on Sept. 6, PTHA president Bob Hutt and board of directors member John Julia, both elected in 2022, initiated legal action to try to correct what they alleged was years of mismanagement “by self-interested Directors with conflicting goals who conducted themselves without regard for their fiduciary obligations to PTHA and to the member Horsemen that it dutybound to represent.”
Among the allegations were charges of obstruction to corruption investigations and more than a million dollars of “illicit and disguised ghost consulting payments” and “lame duck” contract awards that were purportedly authorized by and at times reportedly made to the PTHA's past president and the organization's current executive director.
The petition alleged that those board members failed to carry out duties they were elected to perform on behalf of the 2,500 owners, breeders and trainers that the PTHA represents at Parx.
The directors that Hutt and Julia want removed are Jeffrey Matty, Jr. (who also is under contract to work as the PTHA's executive director), Kathleen DeMasi (the PTHA's vice-president), Charles Asensio, Jack Armstrong, Scott Lake, Robert Reid, Jr., and John Servis.
Those seven directors led off their Oct. 21 legal response by alleging that Hutt and Julia have failed to comply with a requirement in the law they are trying to use to remove the directors that relates to judicial supervision of corporate action.
“More importantly,” the respondents continued, “the Petition is riddled with falsehoods that can (and will) be easily disproven.”
The legal response continued: “Although [the petition] rails against the alleged misdeeds of Mr. Hutt's predecessor as President of the Association [Salvatore DeBunda, who had served four consecutive three-year terms as president and a total of nine terms on the board of directors before Hutt won the presidency via election], it fails to allege any material ongoing conduct that substantiates the severe relief that the Petition seeks. Of the little that is alleged in the Petition that is actually purportedly 'ongoing,' the allegations are vague, conclusory and have no basis in fact or reality.”
Hutt and Julia's petition stated that the seven so-called legacy directors “have created a voting block that, notwithstanding the fiduciary obligations each Director owes to PTHA, routinely vote to ignore, condone, and conceal past misconduct, perpetuate ongoing misconduct, and prevent PTHA, under the leadership of [Hutt], from taking timely and effective action to enforce its rights and recoup its losses.”
The allegations made by Hutt and Julia do not constitute a criminal complaint, nor are the petitioners attempting to use the court filing to recover any purportedly misspent money.
But the aggregate amount of money that Hutt and Julia allege is linked to purported malfeasance reaches beyond seven figures, and it is possible that as the civil case proceeds, it could generate interest from law enforcement that might result in separate criminal charges.
Not a subscriber? Click here to sign up for the daily PDF or alerts.
