John Stewart is the American businessman who almost bought champion racehorse Winx’s first foal.
He announced himself in Australian racing circles last year by boldly declaring he would pay a mind-boggling $9 million for the unraced 18-month-old-filly, by stallion Pierro, at the Inglis Easter Sales.
Resolute Racing owner John Stewart has invested in Australian yearlings.
Still, it wasn’t enough. He was outbid by Winx’s determined part-owner Debbie Kepitis.
Kepitis, the daughter of the late poultry tycoon Bob Ingham, paid a southern hemisphere record of $10 million for the daughter of Winx.
Missing out on the sale did not dampen Stewart’s sudden appetite for Australian bloodstock.
His Resolute Racing, a thoroughbred breeding and racing operation based in Midway, Kentucky, still splashed out $5.4 million on six yearlings, comprising two colts and four fillies.
Winx and her foal in the NSW Hunter Valley in October 2022.
His buyers were back for more at the January Magic Million sales on the Gold Coast, splurging $6 million on nine yearlings, including spending more than $3 million on two fillies – a $1.8 million Written Tycoon filly and $1.6 million I Am Invincible filly – in 10 minutes.
Remarkably, last month’s Magic Millions sales were taking place at the same time Stewart was dealing with a $US22 million ($35 million) litigation claim against his private equity firm, MiddleGround Capital, in the New York Supreme Court.
It was alleged by Archean Capital Partners that Stewart and MiddleGround had acted in “bad faith” for purportedly falling behind and refusing to pay $US22 million in contractually due revenue shares.
Soon after the claim was launched in December last year, Stewart took to social media platform X to say his company believed the disagreement was an attempt “to leverage litigation to pressure us into an unfair agreement”.
Owner Debbie Kepitis with Winx – and her lucky suit – in 2018.Credit: Eddie Jim
“I am not easily intimidated, and I firmly believe in confronting bullies,” he wrote.
Stewart and MiddleGround defended the court case and denied the allegations made against them.
They reached an “agreement in principle” to settle the breach-of-contract lawsuit on January 22, and both parties have until February 23 to finalise the details.
The terms of the settlement, including any payment, are not publicly known. The allegations against Stewart will not be tested in court if the case is settled.
“I guess those waiting for my dispersal sale will have to wait a little while longer … ” Stewart posted on X.
That settlement deal was announced two weeks after Stewart’s Gold Coast buy-up – a fact that had not escaped the Magic Millions Sales management.
Magic Millions managing director Barry Bowditch told this masthead that Stewart had informed them of the court case before the sales.
While Bowditch would not confirm if payments for the nine yearlings had been finalised, he said Stewart’s company, Resolute Racing, was adhering to all of its requirements.
Bowditch said Magic Millions, a thoroughbred sales company owned by Gerry Harvey and Katie-Page Harvey, had no reason to be concerned by the New York court case.
When approached by this masthead, Stewart said there was little for him to say because the claim had been settled.
“Sometimes in America people use lawsuits to try to intimidate people, but I won’t be intimidated,” he said.
The New York lawsuit stated that Archean Capital Partners, a private market investment platform, provided $US75 million ($120 million) in initial capital in 2018 in exchange for a share of MiddleGround’s revenue.
Resolute Racing owner John Stewart at Royal Ascot.
Part of the claim also suggested that Stewart had been distracted from managing MiddleGround Funds, as part of their agreement, because of his thoroughbred racing interests.
“Stewart’s newfound interest in buying, selling, and raising thoroughbred horses has diverted his attention from growing and managing the MiddleGround Funds and, on information and belief, has caused him to spend less than the ‘substantial’ amount of time he is required to devote to the management of the Funds,” the lawsuit stated.
It also stated: “Stewart began to heavily invest in ‘[horse] racing and bloodstock,’ including spending over $25 million at a public auction in 2023 and eventually acquiring Shadayid Stud from Shadwell Farm, [now] renamed Resolute Farm.
“Stewart was contractually required to obtain Archean’s written approval before making this type of investment …”
Stewart is a self-made man. A short biography on the MiddleGround website reveals the father of four started his career as an hourly line worker at Toyota Motor Corporation.
He held numerous management and executive positions over an 18-year career before moving into private equity in 2007. He is the founding and managing partner of MiddleGround.
Often referred to as an American billionaire, Stewart told the Thoroughbred Daily News website last month that the New York Supreme Court case was the first time MiddleGround had been involved in any litigation.
“We are confident that our position is justified,” he said. “We trust the legal process, and we look forward to our opportunity to tell our side of the story. ”
He also said that racing people were learning that he was good for the industry, having bought his first horse in 2022.
“Early on, I think people thought, ‘Here’s a guy spending a lot of money. He’s not making good decisions’,” Stewart said.
“A year later, I think people are seeing I’m making good decisions, and being a positive part of the industry.”
It remains to be seen whether racing will be good to Stewart.
Winx’s foal is still unraced, so the fortunes of being the losing bidder are still unknown, while only time will tell if Stewart’s nine Magic Million yearlings were a good investment.
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