Good stuff Bev. I remember on the old forum people wondering how much Coolmore bought AP's breeding rights for. Now we know.
Zayat Stables Provides MGG with Confirmation That Its Assets Included Certain Breeding Rights to American Pharoah 14. On or about January 16, 2015, Zayat Stables sold 100% of the stallion shares of AMERICAN PHAROAH pursuant to a purchase agreement (the “AMERICAN PHAROAH Purchase Agreement”) to Orpendale, a thoroughbred horseracing organization affiliated with the thoroughbred horseracing organizations Coolmore and Ashford Stud. Zayat Stables received over $23 million in proceeds from Orpendale in connection with the AMERICAN PHAROAH Purchase Agreement.
Attorneys for MGG Investment Group, which is suing Zayat Stables for allegedly defaulting on a $23 million loan, filed paperwork Feb. 11 naming a slew of additional defendants, many of whom purchased horses or breeding rights privately from Zayat Stables. Yeomanstown Stud was named for its purchase of El Kabeir; Hill 'n' Dale for its purchase of American Cleopatra; LNJ Foxwoods and Orpendale (Coolmore) for their purchase of American Pharoah breeding rights; Flintshire Farm and Brad Sears for its purchase of breeding rights to mare Lemoona; Thomas Clark Bloodstock for its purchase of Lemoona's breeding rights from Flintshire; MyRacehorse.com for its purchase of part of Amandrea; and McMahon Thoroughbreds of Saratoga for its purchase of Solomini. The complaint claims the purchasers of horses and breeding rights from Zayat possess assets which do not rightfully belong to them and that they knew or should have known that MGG was owed proceeds from those sales as repayment for Zayat's loan.
Every buyer's worst nightmare: that your seller does not in fact own the subject matter of the sale, free and clear of liens and encumbrances.
There are a number of very sophisticated players mentioned in the Amended Complaint . It is very surprising that they completed their acquisition without conducting a fair amount of due diligence. The UCC-1 financing statements that had been filed ought to have put them on notice of another party with an interest in the collateral and the proceeds of sale.
Should be interesting to see how this is ultimately resolved
Including in the filing is a 143-page listing of his obligations totaling $14,755,171.74 and shows large debts to numerous racing entities, including large debts to trainers. They include Bob Baffert, $227,884.17; Brad Cox, $194,836.19; Mike Maker, $120,921.88; Richard Baltas, $316,070.12; Rudy Rodriguez, $394,437.17; Steve Asmussen, $102,541.10; and Todd Pletcher, $125,598.69.
The documents say that Zayat has debts to the shipping company Brook Ledge of $164,401.34, and there are over $200,000 in debts from veterinary providers including Hagyard Equine Medical, Kentucky Equine Medical Associates, Kesmarc, Rood & Riddle, Stephen Selway and Teigland, Franklin & Brokken.
By far the largest debt on the list is the $7,900,000 listed for the Manhattan-based Cedarview Capital Management LP.