S.K. Johnston, III and Julie N. Boyle f.k.a. Julie N. Johnston, et al. - Page 10

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                  When petitioner discovered that horse farms all over                                
            Kentucky and Tennessee were experiencing similar problems, he                             
            consulted with Dr. Haaland, a leading agribusiness specialist and                         
            expert in grass technology.  After analyzing grass samples from                           
            Bendabout's pasture, Dr. Haaland determined that the grass was                            
            contaminated with a toxic fungus, which was causing the mares'                            
            reproduction problems.  Dr. Haaland recommended that Bendabout                            
            replant its pastures if it intended to maintain its breeding                              
            program.  Sometime prior to 1990, Bendabout incurred substantial                          
            expenses in land preparation and seed costs replanting 45 acres                           
            of pasture.  During this time, Tennessee entered into a severe 4-                         
            year drought period which devastated much of the farm industry in                         
            the southeast.  As a result, the first two or three attempts to                           
            reestablish the pastures failed.  Finally, after the pastures had                         
            been replanted, Bendabout purchased seven well-bred and conformed                         
            mares to enhance the breeding business.                                                   
                  The farm's thoroughbred program faced further difficulties                          
            stemming from problems in the industry itself.  In 1986, there                            
            was a drastic drop in the average and median prices for                                   
            yearlings.  Starting in approximately 1988 through 1995, many of                          
            the historically very successful and well-known horse breeding                            
            farms filed for bankruptcy.  After a history of losses, Bendabout                         
            liquidated its thoroughbred breeding program in 1993.                                     
                  Another part of petitioner's business plan for Bendabout was                        
            to convert some of the cattle business to a more profitable polo                          



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