Judge dismisses claims seeking to repossess Yeomanstown Stud stallion

A Fayette County circuit court judge on Friday dismissed claims against Yeomanstown Stud by a New York-based investment bank seeking to repossess the stallion El Kabeir as part of its ongoing lawsuit for fraud and breach of contract against Zayat Stables.

Yeomanstown Stud in Ireland bought El Kabeir from Zayat Stables for $500,000 (£390,095/€453,400) on September 20, 2017, and has stood the stallion since then. On February 11 of this year, MGG Investment Group filed an amended complaint to its lawsuit that included Yeomanstown as a defendant.

MGG argued it was entitled to ownership of the stallion and the proceeds of any stud fees or progeny sales because the stallion had been included in the collateral associated with tens of millions of dollars it loaned to Zayat Stables.

The amended complaint lists eight other defendants that bought either breeding rights to Triple Crown winner American Pharoah or horses from Zayat Stables from September 2017 through October 2019. These assets include nine breeding rights, the stallion Solomini, the Grade 1-placed mare American Cleopatra, and race mares Lemoona and Amandrea.

In its motion, Yeomanstown Stud denied any fraud occurred when it acquired Grade 2 winner El Kabeir and claimed MGG did not meet a statutory prerequisite as it relates specifically to action taken against a purchaser or selling agent of an equine interest.

K.R.S. 413.242 states: "Before a party possessing a security interest or lien against an equine interest that has been sold without a debt to the party being discharged may bring an action against the purchaser or selling agent of the equine interest, the secured party shall pursue a remedy against the debtor to the point where a judgment is rendered on the merits of the suit or the suit is dismissed with prejudice."

El Kabeir: won the Grade 2 Kentucky Jockey Club Stakes for Zayat StablesCredit: Jessie Holmes/EquiSport

The motion also noted that action taken for the "possession of specific personal property" must commence within two years of the taking and holding of the property, according to Kentucky law.

During Yeomanstown's hearing, Fayette Circuit Court Judge Kimberly Bunnell agreed that MGG had not exhausted its remedies against Zayat Stables through its lawsuit and that MGG was acting outside the two-year statute of limitations, so she dismissed all of MGG's claims, according to Tom Bullock with Bullock & Coffman, which represented Yeomanstown.

The judge's ruling is without prejudice, meaning MGG could resubmit a claim against Yeomanstown after its lawsuit with Zayat Stables is completed if it can prove it didn't know the stallion had been sold. Bunnell said she didn't have enough information to make this determination.

Bullock said a follow-up claim by MGG is unlikely because the sale of the stallion was widely publicized.

Research by BloodHorse shows Yeomanstown sent out a press release announcing the sale on October 24, 2017, and that release was published on both Twitter and Facebook. The announcement also was picked up by multiple media outlets in Europe and the United States.

"We're completely dismissed, and this ruling could pave the way for the other defendants," Bullock said, noting that K.R.S. 413.242 refers to "equine interests," which applies to the animals as well as breeding rights or shares.

Yeomanstown is the second defendant in the amended complaint to have its claims dismissed. MGG agreed on February 18 to drop all claims against Thomas Clark Bloodstock, which bought the mare Lemoona for Rigney Racing at this year's Keeneland January Horses of All Ages Sale.

The claims were dropped because the bona fide purchaser of a horse at public auction has clear title to a horse if it is sold at public auction regardless of whether a lien or security interest existed previously, according to Kentucky law.

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