Bankruptcy court approves settlements in Zayat’s cases

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According to online court records, the US Bankruptcy Court in New Jersey on August 23 approved motions to settle and compromise claims filed by trustees in the bankruptcy cases of Ahmed Zayat and Zayat Stables, ending disputes. in most business.

Donald Biase, trustee in Zayat’s personal bankruptcy case, announced details of his intention to settle in early June.

A similar notice was filed in late July by trustee Jeffrey Testa in the Zayat Stables case following mediation that involved the deal’s main creditors, MGG Investment Group and affiliates. No objections were filed in either case, according to certificates filed in the cases. The settlements were approved by Judge Vincent F. Papalia.

Biase’s settlement in Zayat’s personal case was previously set for an approval hearing on July 19, but was postponed to allow for a more comprehensive settlement involving a tangle of claims in the Zayat Stables case, where more than 6 $.5 million will change hands in the settlement.

Resolving the claims doesn’t necessarily end all of Zayat’s legal troubles, but it did end many of them for the man who campaigned at home and champion American Pharaoh to victory in the Triple Crown and Breeders’ Cup Classic 2015 (G1).

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The only loss suffered by the son of Pioneerof the Nile, apart from his debut, was a second place finish to Keen Ice in the 2015 Travers Stakes (G1). With nine wins from 11 starts for trainer Bob Baffert, American Pharoah earned $8,650,300; more than the cumulative funds involved in the settlements made by the bankruptcy trustees and MGG with Zayat and members of the Zayat family.

Baffert himself fell out of favor after the 2021 Kentucky Derby presented by Woodford Reserve (G1) when his apprentice and race winner, Medina Spirit, tested positive for a substance the stewards determined was not allowed on the race day. A hearing on the appeal filed by owner Amr Zedan and Baffert is taking place this week before the Kentucky Horse Racing Commission.

Both Zayat cases were Chapter 7 liquidations filed in the fall of 2020. However, they were not the first glimpse of that framework for the Egypt native, who filed for Chapter 11 bankruptcy in 2010 following of a dispute with creditor Fifth Third Bank. Around 100 creditors were listed in the 2010 file; around 150 were listed as of 2020.

The 2010 case was dismissed about a year after it was filed following court approval of a Chapter 11 reorganization plan.

American Pharoah was born the following year, taking Zayat to dizzying heights in the thoroughbred industry with the first Triple Crown winner in 37 years before his fortunes reversed and collapsed a few years later.

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