Zayats Move to Dismiss Lawsuits Based on Jurisdiction

Defendants Ahmed Zayat, his family members, and the financially troubled Zayat Stables, LLC, are collectively asking a Kentucky court to dismiss a “fraudulent scheme” contract breach lawsuit by New York investment firm MGG Investment Group, LP, on the basis that the complaint has not been brought in the correct legal jurisdiction.

Eric Mitchell of the Blood-Horse first reported the story Friday, citing Apr. 21 court documents.

The January civil suit claimed that financially strapped Zayat family members allegedly orchestrated a years-long scheme “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.

“None of the actions that form the basis of the fraud claim are alleged to have occurred in Kentucky or to have arisen out of any action taken in Kentucky. Nor did any injury occur to MGG–in Kentucky,” the Blood-Horse reported, citing three memorandums filed on behalf of the Zayats.

“The contracts at issue in this action were negotiated and executed in New York and New Jersey and provide for the application of New York law,” the filings quoted by the Blood-Horse continued. “Moreover, any purported harm as a result of the fraud alleged in the complaint will be suffered by plaintiff in New York.”