One of America’s leading owners of thoroughbred racehorses has recently filed for bankruptcy, but that may not be the end of his woes.
New Jersey businessman Ahmed Zayat campaigns more than 200 thoroughbreds under the name of Zayat Stables, and has had many prominent winners, including last year’s two year old champion, Lookin’ at Lucky, who at this writing is the current favorite for the Kentucky Derby.
But the loans Zayat took out to purchase many of those horses have come back to haunt him. Last month Zayat filed a Chapter 11 bankruptcy case to seek protection from creditors.
New York Times sportswriter Joe Drape reports one creditor has particularly riled Zayat — Kentucky’s Fifth Third Bank, which sued him last December claiming he was in default on $34 million in loans. Zayat counter-sued, claiming predatory lending practices, but ultimately decided bankruptcy court offered a better forum for the dispute.
But Zayat may have more problems than Fifth Third’s loans. Among his assets are loans he made himself to Michael and Jefferey Jalinsky, brothers who were recently convicted of illegal bookmaking in Nevada.
Association with known bookmakers is a common ground for state racing agencies to suspend a horse owner’s license. Federal bankruptcy protection, however, often takes precedence over state rulings. It will be interesting to see if Zayat can avoid licensing trouble with bankruptcy court strategies as he seeks victory in North America’s biggest race, the Kentucky Derby.