NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 12a1161n.06

No. 12-5185 

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

KNC INVESTMENTS, LLC,

Plaintiff-Appellant,

v.

LANE’S END STALLIONS, INC.,

Defendant-Appellee.

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ON APPEAL FROM THE UNITED

STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF KENTUCKY

Before: SILER, COLE and SUTTON, Circuit Judges.

SUTTON, Circuit Judge. Lane’s End Stallions asks us to dismiss this appeal as moot based

on events that occurred after the district court issued its decision. Yet the district court, and not the

court of appeals, is best suited to decide whether these new facts require the federal courts to put this

case out to pasture, as it were. We therefore must remand the case. 

This appeal stems from a dispute between Lane’s End Stallions—the manager of a syndicate

that owns the thoroughbred Lemon Drop Kid—and one of the syndicate’s members, KNC

Investments. An agreement governs the Lemon Drop Kid syndicate, and it details how the fractional

owners of the horse will share costs and profits. KNC believes that the syndicate agreement and the

KentuckyBusiness CorporationsAct (the statute that regulates incorporated entities in the state) give

it the right to obtain the names and contact information of the other owners and to copy the
No. 12-5185

KNC Investments, LLC v. Lane’s End Stallions, Inc.

syndicate’s books and records. Lane’s End disagrees, and it thus refused to give KNC access to the

syndicate’s records. The district court sided with Lane’s End, and KNC appealed.

Meanwhile, 39 of the 40 owners in the Lemon Drop Kid Syndicate (all but KNC) amended

the syndicate agreement to clarify that neither KNC nor any other owner could obtain this

information. After the amendment, the syndicate filed a motion to dismiss the appeal (and case) as

moot. As support, Lane’s End submitted the amended syndicate agreement and an affidavit

describing the amendment process, and at the same time asked us to expand the record to include

these items.

Rule 10 of the Federal Rules of Appellate Procedure allows us to correct or modify the record

on appeal if evidence was “omitted from or misstated in the record by error or accident.” Fed. R.

App. P. 10(e)(2). Lane’s End does not argue that the amended agreement and affidavit were omitted

from or misstated in the record. It contends instead that an appellate court may use its equitable

powers to consider “factual events occurring after an appeal has been filed” “to determine

jurisdictional questions such as mootness.” Mot. to Supp. R. at 3. For its part, KNC contests the

new evidence and wishes to submit its own (contrary) evidence to show that the controversy remains

a live one. Perhaps this case is moot, or perhaps the new facts relate to the merits of the dispute

between KNC and Lane’s End. Either way, the relevant information does not appear in the current

record, and the district court is best suited to find any relevant facts and to determine in the first

instance whether a live controversy remains. See Inland Bulk Transfer Co. v. Cummins Engine Co.,

332 F.3d 1007, 1013 (6th Cir. 2003) (declining to exercise equitable powerto supplement the record

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No. 12-5185

KNC Investments, LLC v. Lane’s End Stallions, Inc.

on appeal because the new evidence “could have been presented to the district court” and did not

establish “beyond doubt the proper disposition of the case”). 

We need no additional facts, however, to reject KNC’s claim that the Kentucky Business

Corporations Act gives it the right to inspect and copy the syndicate’s records. Kentucky law treats

owners of horse-ownership syndicates as tenants in common. See, e.g., Weisbord/Etkin/Goldberg

v. Gainesway Mgmt. Corp., No. 2007-CA-000280-MR, 2008 WL 820950, at *1 (Ky. Ct. App. Mar.

28, 2008). And by its terms, the Business Corporations Act applies only to corporations, not to

unincorporated syndicates. See Ky. Rev. Stat. §§ 271B.1-400(4) & (10) (distinguishing a

“corporation,” which includes only incorporated for-profit corporations, from an “entity,” which

includes unincorporated associations and persons sharing common economic interests); id.

§ 271B.16-020 (giving shareholders only of a “corporation” the right to inspect and copy corporate

records). We thus need no additional facts to conclude that the district court correctly rejected

KNC’s claims under the Business Corporations Act.

Forthese reasons, we grant Lane’s End’s motion to file its suggestion of mootness under seal,

deny its motion to supplement the record and remand this case to the district court.

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