Defendant Added to Zayat Suit Files to Dismiss Claims

The first of seven defendants named in an amended complaint filed this week by a New York-based investment bank seeking to regain assets purportedly sold by Zayat Stables that were also collateral in tens of millions of loans has responded with a motion to dismiss.

Thomas Clark Bloodstock filed its motion Feb. 14 with Fayette (Ky.) Circuit Court Division 9 and asked the court to dismiss MGG Investment Group's claims to the broodmare prospect Lemoona, whom Thomas Clark Bloodstock bought on behalf of Rigney Racing for $250,000 at this year's Keeneland January Horses of All Ages Sale. The graded-placed stakes winner by Lemon Drop Kid  was consigned by Taylor Made Sales Agency.

In its motion, Thomas Clark Bloodstock stated it relied on the Keeneland Conditions of Sale, which state "the purchaser of a Thoroughbred at an auction sale in Kentucky receives title lien and encumbrance free."

"If MGG has a claim related to the sale of Lemoona," the motion continues, "it is only to the proceeds of the sale which were received by Keeneland."

In an amended complaint filed Feb. 11, MGG Investment Group contended that Flintshire Farm and Brad Sears bought Lemoona improperly for $150,000 through their agent West Bloodstock from Zayat Stables. MGG is taking the position that Flintshire and Sears should have known the firm had a security interest in the mare and that she wasn't Zayat Stables' to sell. The firm requested in its complaint that all proceeds related to the sale of the mare and her offspring be put in a trust for the benefit of MGG.

The motion filed by Thomas Clark Bloodstock states Rigney executed a contract with Lane's End to breed the mare to the farm's stallion Quality Road , who stands for $200,000, believing it owned clear title to Lemoona. Rigney is expected to send the mare to Lane's End soon to be bred, according to the motion, and it would be "severely prejudiced if it commits to the payment of the stallion service fee for the Quality Road breeding to Lemoona, if it is determined it does not own the horse."

In support of its motion to dismiss, Thomas Clark Bloodstock said it was not the purchaser of Lemoona and does not currently own the mare. The suit also notes that Kentucky law states: If any horse of registered breed … or any interest in such a horse is subject to a lien or a security interest and that horse or interest is sold at a public auction in the ordinary course of business by an organization engaged in the business of selling these horses or interests at public auction, a bona fide purchaser for value of the horse or interest takes title to the horse or interest free and clear of the lien or security interest.

"Because Rigney is a bona fide purchaser for value of Lemoona, a registered Thoroughbred, the racing of which is governed by KRS Chapter 230, at the Keeneland public auction, the lien claim of the Plaintiff has terminated," the motion concludes.

Thomas Clark Bloodstock's motion followed an amended complaint filed by MGG Feb. 11, which added six other defendants to a lawsuit the firm has against Zayat Stables for breach of contract and fraud. In its amended complaint, MGG is seeking to acquire nine breeding rights to 2015 Triple Crown winner American Pharoah  that were purportedly sold collectively for $3.3 million between December 2018 and June 2019, with two rights sold to LNJ Foxwoods and seven to Orpendale, an entity associated with Coolmore and Ashford Stud.

The complaint also argued for the return of stallions El Kabeir, who was purportedly sold to Yeomanstown Stud in Ireland, and Solomini , who was sold to McMahon of Saratoga Thoroughbreds. Other horses reported in court documents as sold by the Zayats include grade 1-placed mare American Cleopatra and race mare Amandrea.