Zayat Lawsuit Broadens to Include Prominent Bloodstock Business Partners

[Wandering Eyes]

The New York lending firm that last month initiated a $23-million lawsuit against Ahmed Zayat and his financially troubled Zayat Stables, LLC, has broadly amended its civil complaint in a Kentucky court. As of Tuesday, the suit now additionally targets 10 prominent bloodstock individuals and entities that the plaintiff alleges played a role in the “fraudulent scheme” orchestrated by Zayat family members “to sell at a steep discount several millions of dollars of Zayat Stables’ assets” that had been pledged as collateral for $30 million in loans.

The wide-ranging updated complaint filed Feb. 11 by MGG Investment Group, LP, in Fayette Circuit Court is seeking the return of individual horses previously owned by Zayat Stables to the court-appointed receiver now handling the case, plus the return of any breeding shares that changed hands. In instances where matings have already taken place based on those breeding rights, the plaintiff also wants any proceeds related to the breeding stock or their future offspring to be held in “constructive trust for the benefit” of MGG.

“There is an actual and justiciable controversy between Plaintiff and Defendants Orpendale [Coolmore Stud], Ashford Stud, LNJ Foxwoods, Hill ‘N’ Dale, Yeomanstown Stud, My Racehorse, Flintshire Farm, Brad Sears, Thomas Clark Bloodstock, and McMahon Thoroughbreds in that Plaintiff holds priority security interests over all of the assets that Zayat Stables held when it entered the Loan Documents,” the complaint states.

“MGG also brings claims for intentional interference with contract against two affiliated horse breeding organizations, Orpendale [Coolmore] and Ashford Stud, for their facilitation of the purported sales which they knew would cause Zayat Stables to breach its loan agreements,” the complaint states.

To remedy this alleged interference by Coolmore and Ashford–which is related to the Zayats’ purported sale of nine lifetime breeding shares to 2015 Triple Crown winner American Pharoah–MGG is requesting an award of damages against Coolmore and Ashford “in an amount to be proven at trial, but no less than $10.89 million [plus relevant costs].”

This story will be updated.

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