The MiddleGround Capital lawsuit was a breach-of-contract case filed in December 2024 by Archean Capital Partners, which accused the Lexington, Kentucky private equity firm and its founder John Stewart of refusing to pay more than $22 million in revenue shares owed under a 2018 anchor-investor agreement. The parties reached an agreement in principle in January 2025 and settled on confidential terms, with no finding of wrongdoing against Stewart.1Thoroughbred Daily News. Resolute Racing’s Stewart and His Private Equity Firm Sued
Who Sued MiddleGround
Archean Capital Partners, an investment platform that provides anchor capital to newly formed private equity firms, committed $75 million to MiddleGround’s debut fund when the firm launched in 2018. In exchange, Archean was entitled to a share of the revenue MiddleGround generated from managing its funds.1Thoroughbred Daily News. Resolute Racing’s Stewart and His Private Equity Firm Sued
Archean filed its complaint on December 19, 2024, in New York County Supreme Court. The named defendants were MiddleGround Capital, Stewart, and two other principals at the firm, Lauren Mulholland and Scot Duncan.2BloodHorse. Stewart Faces Lawsuit Seeking More Than $20 Million
The $22 Million Claim
The money dispute was precise. According to the complaint, the parties had previously agreed that the total revenue share due to Archean came to $36,042,342. Archean said it had received $13,203,823 of that figure, leaving $22,838,519 unpaid as of October 31, 2024.2BloodHorse. Stewart Faces Lawsuit Seeking More Than $20 Million Archean also asked the court to declare all future revenue-share payments immediately due and to order full indemnification under the contracts.1Thoroughbred Daily News. Resolute Racing’s Stewart and His Private Equity Firm Sued
The Horse Racing Allegations
Beyond the unpaid balance, Archean alleged that Stewart had broken several terms of the agreement governing how MiddleGround was supposed to operate. The complaint accused him of diverting his focus to Thoroughbred horse racing through his Resolute Racing operation rather than running the funds.
Three provisions were central to the complaint. The agreement required MiddleGround’s principals to devote the “substantial majority” of their working time to the funds, and Archean said Stewart failed to meet that threshold.3Paulick Report. John Stewart Named in Lawsuit Over Equity Firm Management It also required him to get Archean’s written approval before buying “all or a substantial portion” of a third-party business, which Archean alleged he did not do for his horse-racing acquisitions, including the December 2023 purchase of an 850-acre Thoroughbred farm formerly known as Shadayid Stud, since renamed Resolute Farm. The complaint alleged Stewart spent more than $25 million at a public auction in 2023 alone.2BloodHorse. Stewart Faces Lawsuit Seeking More Than $20 Million A third provision called for formal notice to Archean when a principal spent less than the contractually required time on MiddleGround business, and the complaint said no such notice was given.4Horse Racing Nation. Resolute Racing Founder Stewart Is Sued in Private Equity Dispute
Stewart’s Response
Stewart denied the allegations and described the litigation as an attempt to “pressure us into an unfair agreement.”2BloodHorse. Stewart Faces Lawsuit Seeking More Than $20 Million After the case was resolved, he said the horse-racing conduct Archean complained about never factored into how it was settled: “The allegation that spending on horse racing was not approved was not even part of the resolution. Horse racing was not an issue.”5BloodHorse. Litigation Against MiddleGround, Stewart Resolved
How the Case Ended
The case moved quickly. A court filing dated January 22, 2025, said the parties had reached an “agreement in principle” and gave them until February 23, 2025, to finalize the paperwork.6Paulick Report. Lawsuit Against John Stewart Settled The financial terms were not disclosed. Stewart told reporters, “I can’t really talk about the settlement itself because it’s confidential.”7Thoroughbred Daily News. Stewart Reaches Agreement in Principle to Settle $22M Lawsuit
An editor’s note later added to Thoroughbred Daily News’ original coverage confirmed that the suit had been resolved with “no finding of wrongdoing on the part of Mr. Stewart.”1Thoroughbred Daily News. Resolute Racing’s Stewart and His Private Equity Firm Sued No further litigation between Archean and MiddleGround has been reported.