Zayat Stables Seeks Dismissal of Fraud Claim With MGG

An attorney for Ahmed Zayat's Zayat Stables, which was sued by MGG Investment Group for fraud and breach of contract on tens of millions of dollars in loans, filed a motion March 20 to dismiss the fraud claim in Fayette (Ky.) Circuit Court.

Zayat's counsel, Jay Ingle, wrote in the filing that a fraud claim is duplicative of MGG Investment Group's breach of contract claim and "is therefore barred under Kentucky law." He claims MGG has extended the case beyond any contractual rights it may have.

Zayat Stables, MGG, and other entities involved with Zayat horses have been at odds in court since the early part of the year. In January, Judge Kimberly Bunnell assigned a receiver to manage the racing business of the financially troubled stable, and the case has remained active since.

During a hearing in February, W. Craig Robertson III, a lawyer for MGG, cited a receiver's report that noted Zayat's one active racing bank account held less than $2,000 at the time the receiver began work in managing the stable's finances. Besides MGG, Zayat is being sued by trainer Mike Maker for $120,000 in unpaid training fees, and the stable has other creditors seeking payment.

Since the time of the initial lawsuit, MGG has added defendants in its suit against Zayat Stables, several of which have been dismissed, according to court documents. Those defendants were involved in business transactions with Zayat Stables, making purchases of assets MGG contended were part of the collateral Zayat Stables used to secure its loans with MGG.