After the parties could not come to an agreement on their own, the Purebred Arabian Trust (referred to as the "Trust") brought this case, not seeking any damages, but solely to obtain a court determination that it is entitled to ownership of the technology AHA uses to register purebred Arabian horses and to perform related services. After eight days of trial, the Court found that focusing on “ownership” does not resolve the real issue. The Court concluded, “regardless of who owns the present version of the HRS (or future updates of the HRS or even some yet unknown form of technology) the real question is what obligation does the Association have to maintain a technology system capable of registering purebred Arabian horses?” On that question, the court has concluded that the Trust is indeed entitled to and AHA is obligated to provide to the Trust a standalone software system and database which performs those registration functions—not for the Trust to compete with AHA but to protect the breed by allowing the Trust to resume performing purebred registrations in the event that AHA cannot do so. Judgment has entered on behalf of the Trust. It is thus the prevailing party on the principal dispute with AHA.
AHA’s attempt to spin this result as a win for AHA is simply wrong. Instead of acknowledging the Trust’s ownership of the existing HRS system, which would have cost it nothing since it retains a perpetual license to use the software, AHA unnecessarily enlarged the size of the litigation, incurred legal expense estimated to be several hundred thousand dollars, and is now obligated to spend significant further amounts to create and maintain for the Trust a separate registration system that it does not presently have.
The four individual Trustees who were the targets of AHA’s malicious claims of breach of fiduciary duty and conspiracy are gratified by the Court’s forceful rejection of those claims. These claims failed not only because AHA owns HRS, but for a total lack of evidence. As the Court noted, AHA was unable to establish even that there was a conflict of interest in the Trustees voting to approve AHA technology expenditures, which would have passed regardless of any Trustee votes and, as all agreed, were necessary and in the best interests of AHA. Under Colorado law, AHA is now obligated to pay the reasonable costs of the Trustees’ defense of those claims.
Please find the judge's order below for the PAT / AHA Litigation that was released on September 20, 2018.