Belinda Stronach Responds to Father's Ontario Lawsuit

As the horse racing industry's eyes turn toward the $9 million Pegasus World Cup Invitational Stakes (G1) and inaugural Pegasus World Cup Turf Invitational Stakes (G1T) Jan. 26 at Gulfstream Park, the bitter battle between family members who control the South Florida track continues.

On Jan. 21, Belinda Stronach, chairman and president of The Stronach Group, filed a countersuit against her father, auto-parts magnate and horse racing visionary Frank Stronach, in response to a lawsuit the elder Stronach and his wife, Elfriede, leveled against their daughter in October accusing the 52-year-old of mismanaging the family fortune and conspiring to take control of it. 

Also named in Frank and Elfriede Stronach's suit is TSG business associate Alon Ossip and the Stronachs' two grandchildren, Frank and Nicole Walker, who are TSG trustees. They also have filed statements of defense, as did the Stronach Consulting Corporation. 

In her filings, Belinda Stronach said her father's allegations that she misdirected TSG funds for her own personal extravagances are not only untrue, it was her father who was squandering money on a number of failed "passion projects" to the detriment of The Stronach Group. In her 78-page defense, Belinda Stronach says that since her father departed TSG, he has sunk millions of dollars into money-losing "idiosyncratic" ventures and has become increasingly difficult to rein in despite giving up his control of TSG in 2011. Belinda Stronach is seeking $25 million from her father.

"Frank's success with auto parts is clear," Belinda Stronach stated in her filings. "But for all his accomplishments in the automotive industry, Frank has a long history of pursuing idiosyncratic business ventures and spending significant amounts of money on passion projects, contrary to the interests of other stakeholders.

"In recent years, Frank has publicly expressed views and behaved in a manner in his personal and professional relationships that, if associated with TSG or any other modern enterprise, would impair the goodwill of its businesses," the filing continued. 

Belinda Stronach subsequently outlines how she, with the help of longtime Stronach family adviser Ossip and TSG chief operating officer Timothy Ritvo, turned around TSG's racing and gambling operations. The filings said under Frank's direction the racing and gambling operations were perpetually in the red, leading Magna Entertainment Corporation (the name for Stronach's non-automotive, non-real estate racing and gaming company) to file for Chapter 11 bankruptcy protection in 2009. 

According to her court filings, revenue from TSG racing and gambling enterprises, which includes the aforementioned Gulfstream Park, as well as Santa Anita Park, Laurel Park and Pimlico Race Course in Maryland, and Golden Gate Fields, has doubled over the past five years increasing from $555 million to more than $1 billion in 2017. 

"Together, TSG management has made horse racing attractive to a new generation of fans, modernized facilities, and enhanced guest experiences into a more expansive entertainment and hospitality experience. Management has also taken significant steps in the professionalization of the business, including introducing human resources policies and employee engagement initiatives," Belinda Stronach said in her statement of defense. 

Among Frank Stronach's most egregious splurges, alleges Belinda Stronach, is commissioning two 12-story-tall bronze statues depicting a Pegasus battling a dragon. Together, the monuments cost $55 million to construct—almost $50 million over budget, according to the filing. One is installed at Gulfstream Park and the second is currently being stored "in pieces" in China.

According to filings over the past decade, Frank Stronach has used TSG funds to the tune of $324 million to bankroll his Adena Farms agricultural pursuits; $117 million on Adena Golf & Country Club, which is currently shuttered; and $43 million on Magnolia, an Austrian racino. 

Ossip, who has worked with the Stronach family since 2006 and was CEO of The Stronach Group, corroborates Belinda Stronach's story, claiming that over time Frank Stronach's passion pursuits became unwieldy and neither he nor Belinda Stronach could convince him that his compulsive spending was draining the empire he had built.