McMahon Files Motion to Dismiss Claims for Solomini

McMahon of Saratoga Thoroughbreds filed a motion March 16 to dismiss all claims a New York investment firm has made to repossess the stallion Solomini  as part of an ongoing lawsuit with Zayat Stables. 

MGG Investment Group, a company that sued Zayat Stables for fraud and breach of contract on tens of millions of dollars in loans, named McMahon of Saratoga along with six other defendants in a Feb. 11 amended complaint to the original lawsuit that seeks to reclaim property MGG says was collateral for its loans.

McMahon was included because it had purchased multiple grade 1-placed winner Solomini for stud duty Dec. 3 from Zayat Stables and Orpendale—each owned 50% of the stallion—for $250,000.

The New York farm has argued, through its attorney Greg Parsons with Stites & Harbison, that MGG has no claim to the stallion because the federal Food Security Act allows anyone buying a farm product from a seller engaged in a farming operation to take that property free of any security interest or lien unless specific notice requirements have been fulfilled by the lender holding the lien. In this case, the state of Kentucky requires a direct notification of the security interest from MGG to McMahon of Saratoga. That did not occur.

MGG did file a financial statement of its security interest in Solomini and other property with Kentucky's Secretary of State office, but this filing isn't enough to meet the notice requirement, according to McMahon's motion to dismiss. 

"Here, MGG fails to allege it provided any direct notice of its security interest in Solomini to McMahon, let alone a written notice complying with the strict requirements," the motion states.

"Since McMahon's purchase of Solomini meets all the requirements of the FSA Rule, McMahon takes Solomini free and clear of MGG's security interest even if that interest is perfected, and even if McMahon knew of MGG's perfected security interest," the motion continued.

The motion to dismiss all claims is scheduled to be heard in Fayette (Ky.) Circuit Court April 17.

Solomini entered stud this year at McMahon of Saratoga for a $6,500 fee. The 5-year-old son of Curlin  is co-owned by Raymond DeStefano and Hidden Lake Farm's Chris Bernhard. 

Among seven defendants named in MGG's amended complaint, Thomas Clark Bloodstock, Yeomanstown Stud, and MyRacehorse.com have already had their claims dismissed. Thomas Clark Bloodstock was involved in the purchase of Lemoona at auction, and Yeomanstown Stud had acquired El Kabeir for stud duty. MyRacehorse had purchased a 55% interest in the race mare Amandrea.

Other motions to dismiss claims have been filed by Ashford Stud and Hill 'n' Dale Farms.