By Bill Finley
Ahmed Zayat has lost the latest round in the courts. Fayette County (Ky) Judge Kim Bunnel has denied Zayat's motion to have the court dissolve an order that appointed a receiver to take control of and sell off the assets of his Zayat Stables. The original order to appoint a receiver came after MGG Investment Group sued Zayat for $23 million, alleging that he had defaulted on loans.
“We are pleased that the court has recognized the need for a receiver in this case,” said MGG lawyer Craig Robertson. “Zayat Stables requested that the order to appoint a receiver be dissolved or modified and the judge declined to do so. That's what we were hoping for. We are happy that the receivership is in place and now it's up to the receiver to identify, take possession of and liquidate their collateral. We look forward to that process happening.”
Elizabeth Woodward, the director of forensic accounting and litigation support at the Lexington accounting firm Dean Dorton, was appointed Jan. 23 as the receiver and has begun the process of selling Zayat's horses and has said that some will be auctioned off at the Fasig-Tipton Kentucky Winter Mixed sale, which begins Monday.
Zayat's attorney had argued that the order to appoint a receiver went well beyond the sale of collateral, allowing for a full takeover of Zayat's company and all of its assets. They feared that giving “unfettered and unchecked” access would allow MGG to pursue fraud claims. Bunnel disagreed, noting that the loan agreement between Zayat and MGG allowed for a receiver.
According to the Blood-Horse, Bunnell said of the loan agreement, “This is not the kind of agreement drawn up on a napkin.”
Blood-Horse also reported that Bunnell may grant the receiver access to Zayat's computer server. The receiver has reported to the court that Zayat was not providing her with the information she had been requesting in order to make a full accounting of Zayat's assets.