This morning the Receiver was notified that MGG amended its Complaint to add several additional parties, the statement read. Ahmed Zayat's attempt to get out from under $19 million in debt has reached yet anotherand purportedly intentionallegal bottleneck. Ashford Stud and Coolmore on Wednesday declined to comment on the filing. "[43] On June 4, 2015, a federal judge in Newark, New Jersey, dismissed Rubinsky's lawsuit, citing both Rubinsky's difficulty in proving his case and the expired statute of limitations. After the company was purchased by Heineken in 2002, Zayat stayed on a few more years but also began investing in racehorses and established Zayat Stables in 2005. Im walking in the streets of New York and people are calling me horse boy'!. All rights reserved. While the selling percentage and price were confidential, Zayat Stables' reported income to the bankruptcy court for the month the deal closed was $7.5 million. [47] Zayat had been betting $200,000 a week through New Jersey's online betting system, and the agency allowed him to "float" $286,000 in credit, "as a courtesy. Consequently, Kentucky does not have 'any significant contacts' to this action, and Kentucky law should not apply.". Bob Bafferts 90-day suspension is ending. f: (732) 747-8955. Justin Zayat was one of three entrepreneurs custom-outfitted in Jos. Ahmed Zayat should not be able to impede the Trustee's analysis or derail his investigation, all of which is being conducted for the ultimate benefit of the Debtor's creditors, MGG wrote. "Because each of the allegations underpinning MGG's fraud claim necessarily relies upon, and would not exist without, the loan documents, and there is no distinction provided whatsoever between the fraud and breach of contract claims, the fraud cause of action must be dismissed as duplicative," the memorandum continued. Back on June 4, the trustee issued a Rule 2004 subpoena to Zayat's wife, Joanne Zayat, and three of their four children, Emma, Benjamin and Justin Zayat. Foxwoods could not be reached immediately for comment. The Zayats' attorney argues that all nine breeding rights had been transferred from individual family members to the ownership of Zayat Stables, so any claims regarding these transactions can no longer be extended to the individuals. "The documents were executed in New Jersey and the Zayat family did not travel to Kentucky to engage in any transaction related to the transfer of the AP breeding rights," the memorandums state. Click Here to sign up for a free subscription. Also, all the transactions were conducted outside Kentucky, so, again, the memorandum states, jurisdiction in Kentucky does not apply. I love my job, which is the best thing ever.. Nor did any injury occur to MGGin Kentucky," state all three memorandums filed by Lexington attorney Bennett Bayer with Landrum & Shouse. El Kabeir now stands at stud at Yeomanstown for a listed fee of 8,000 euros, about $8,700. The Zayat family made an appearance on MSNBCs Morning Joe after American Pharoahs Triple Crown win, Zayat Lawsuit Documents Detail Sale Of American Pharoah To Coolmore. The Zayats' latest filing first and foremost seeks to have the case dismissed for lack of jurisdiction. Justin Zayat had a front-row seat. MGG's Mar. The Zayat family lives in Teaneck, New Jersey with his wife, Joanne. Motivated purely by self-interest and greed, MGG, however, was more interested in litigating this dispute at the expense of other creditors. And it is suing the purchasers, all of whom, the complaint alleges knew or should have known that MGG had a security interest, meaning the horses could not be sold without the investment firms knowledge and consent. [4] Zayat owed about $2.4 million to the Keeneland Association, and $1.2 million to other creditors[38] including clinics, horse transport companies, boarding farms, and trainersamong them Bob Baffert. [14] In addition, Zayat paid $1.6 million for the highest-priced horse at the 2006 Fasig-Tipton Saratoga select yearling sale, a filly by Empire Maker named Mushka, whom he resold in 2008 for $2.4 million. These memorandums assert two other positionsas well: that Zayat family members did not interfere with the terms of the loan agreements with MGG when they sold nine breeding rights to American Pharoah, andthat separate allegations of fraud are not valid because the charges merely repeat what has been alleged as breaches of the contract. The 23-year-old racing and stable manager for Zayat Stables arrived in Lexington, Ky. today on a private flight from New Jersey with his father, Ahmed Zayat. Most of the guys Im working with are at least 60 to 70 years old. "[3], Zayat first began buying Thoroughbred race horses in 2005. [32], In December 2009, Zayat was sued by Fifth Third Bank for an alleged $34 million in unpaid loans. [17], The horses of Zayat Stables began to earn race purses in 2006. [22] He has entered horses in the Breeders' Cup races 16 times, with his best result a fourth-place finish in 2007. "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. His bankruptcy documents listed four loans he had made to members of the Jelinsky family. Specifically, the trustee wanted to see detailed information from the family's allegedly intermingled accounts with banks, credit card companies, other lending-related institutions. The amended complaint also names Zayat Stables owner Ahmed Zayat's children Justin, Ashley, Benjamin and Emma, and his wife Joanne. Horse racing was not exactly on my radar.. Janet Patton covers restaurants, bars, food and bourbon for the Herald-Leader. Further, the bank added an amended provision to its later loans stating, "if Zayat Stables defaulted on any of the Notes, such default would be considered a default under all of the notes thereby entitling Fifth Third to accelerate the principal balance and all accrued interest due and owing under all of the Notes." [36] To settle his debts with Fifth Third, he agreed to annual payments based on a percentage of horse sales and proceeds from claiming races. Three separate memorandums filed April 21 outline why claims made against Ahmed Zayat, his son Justin Zayat, and the entire Zayat family by MGG Investment Group, which loaned tens of millions of dollars to Zayat Stables, should not be settled by a Kentucky court. [51][52] In a related matter, June 1, 2015, days before American Pharoah was to run in the 2015 Belmont Stakes, the New York Times reported that Rubinsky's lawyer, Joseph Bainton, filed a $10-million libel suit against Zayat for comments to the press, including the characterization of Rubinsky's other lawsuit as "extortion, a fraud and blackmail. Subscribe FREE Today! On Wednesday, John Sikura, president of Hill n Dale Farm, said he was unaware of any lawsuit regarding American Cleopatra. MGG claims it never received the proceeds of those sales, which it says it was entitled to per its financing agreement with Zayat. . The amended lawsuit comes after a hearing last week before Judge Bunnell on a request to remove Zayat Stables from the hands of a court-appointed receiver. I did not want you to panic knowing that I still have a chance to save the day. I think of this is as my sports team. Not a subscriber? Documents obtained by the trustee from third parties strongly suggest that the debtor still possesses significant assets in Egypt, Biase continued. The Zayat family and Zayat Stables released a statement on the amended complaint on Thursday afternoon: We are disappointed but not surprised at MGG and Kevin Griffins aggressive attack on the horse industry. It is unimaginable to believe Kentucky has any more jurisdiction over the Zayat family members compared to any other state (not including New York or New Jersey) where the Plaintiff may have selected a forum for bringing its claims, inasmuch as the horse cannot vicariously extend jurisdiction to the Zayat family, that link is meaningless. The July appraisal estimated the horses value at $375,000. Amazon billionaire Jeff Bezos' ex-wife finalizes second . They have four children: Ashley, Justin, Benjamin, and Emma. [32] The plaintiffs alleged that Zayat was allowed to bet on credit, which was a violation of state law. "Joanne Zayat, the Debtor's wife, was the recipient of over $1 million dollars of direct transfers from Zayat Stables. [5] Bodemeister finished a narrow second place in both the Kentucky Derby and Preakness Stakes to I'll Have Another. Real-time updates and all local stories you want right in the palm of your hand. Three times Zayat's horses placed second in the Kentucky Derby. Their eldest son, Justin, helps run the Zayat Stables operation, and their youngest, Emma, inspired the name of Littleprincessemma, dam of American Pharoah. Solomini stands at stud in New York for $6,500 for a live foal. [16] But, in the first of Zayat's many racing disappointments, the colt's promising racing career was cut short by injury after two races. Although New York also stated that they were investigating,[46] there were no news reports of any adverse action. [9], Zayat filed for Chapter 11 Bankruptcy protection in February 2010. Kentucky basketball returns to the top 25. The motions to quash were filed by Justin Zayat, Joanne Zayat, Emma Zayat, Benjamin Zayat and JPZ Holdings LLC. Zayat agreed to pay off his unsecured creditors over two years, without interest, and pay off Fifth Third by 2014. LNJ Foxwoods were partners in 2019 controversial Kentucky Derby winner Country House and last month won two Eclipse Awards for their sprinter Covfefe; they bought two American Pharoah breeding shares for $375,000 each from Zayat Stables in 2018. Zayat, 25, who runs Zayat Stables with his father Ahmed . [45] Zayat claimed that he had no knowledge of the Jelinskys' illegal acts. Yet despite the trustee's request for records of this transaction, no such records have been produced to date, the trustee wrote. Notably, the [Zayats] have made only paltry productions in response to the subpoenas directed to them. I have never spoken to the creditor or received any notice from them since purchase. MGG has previously asserted in court that loans it made in 2016 to Zayat's racing and bloodstock business were the product of years of systematic fraud that Zayat allegedly orchestrated, including Zayat Stables' desperate selling-off of equine assets that had been pledged to MGG as collateral. That was the longest three-week lead-up ever. Justin, a 2015 graduate of New York University, works closely with his father in the Zayat Stables business. Morgan Eads covers criminal justice for the Lexington Herald-Leader. Worse, their counsel has engaged in extensive redactions of the bank account statements they did produce based upon nothing but their own unilateral determinations of relevance, and has also simply omitted bank records for important periods, the filing continued. He also filed bankruptcy proceedings in 2010 when a bank called a note due and tried to foreclose on his horses. Copyright 2023 Blenheim Publishing, LLC. Stating that Fifth Third was "reneging on its promises,"[35] Zayat filed a countersuit in April 2010, alleging the bank engaged in deceptive and predatory lending practices. Aside from Justin, his youngest son, 16-year-old Benjamin, and daughters Ashley and Emma are also involved in stable decisions, and Justin said, "My dad and I call Benjamin the real boss. [4], Zayat's bankruptcy revealed other problems. While Zayat Stables has done business in Kentucky, such as attending public auctions about 25 times over the past 15 years, the Zayats' attorney contends this does not meet the legal threshold required for jurisdiction. That same ongoing pattern of delay, obstruction, and gamesmanship requires that the Motion be denied in its entirety, the filing stated. The Lexington Herald-Leader reported Wednesday that in 2009, "Fifth Third Bank sued Zayat for $34 million, alleging he had defaulted on loans, [and a] deal was reached in 2010 in federal. First of all, the media frenzy. "The locus of a general intangible, including any of the AP breeding rights, is the owner's domicile. The Circuit Court's Order appointing the Receiver directs her to take possession of the collateral and maximize its value, which is the work she is doing. [T]he Trustee's investigation reveals that the Debtor and his family members have engaged in a pattern of intermingling of assets and ongoing financial transactions among themselves, the attorney bankruptcy trustee Donald Biase wrote in a July 13 filing in United States Bankruptcy Court (District of New Jersey). . Lexington, KY 40513. A business entity controlled by Justin, JPZ Holdings, LLC, was also subpoenaed. [28] For his struggle to return to health, Paynter won NTRA Moment of the Year Award and Secretariat Vox Populi Award.[29][30]. global Irish breeding conglomerate Coolmore and Ashford Stud in Versailles, stallion now stands at stud for a reported $200,000. You can see the quality in each Jos. The status of these breeding rights as "general intangible" property by state law also has a bearing on the jurisdiction issue, according to the memorandum. [2] He still owns other business interests in Egypt, including being the majority shareholder of Misr Glass Manufacturing, which is Egypt's largest maker of glass containers. The trustee further argued that the subpoenas at issue are not only fully justified, but many are made necessary because the Debtor himself refused to produce records from a number of the financial institutions at which he has accounts., Biase explained the convoluted process by which Zayat, during the course of his bankruptcy plea, even directed the Trustee to serve his own financial institutions with subpoenas, only to then have the Debtor's family members then move to quash those very subpoenas.. 16 that The Debtor has been extremely cooperative with the Trustee [and has] provided to the Trustee significant documentation respecting his financial affairs. The lawsuit, filed in Fayette Circuit Court in Lexington, accuses Coolmore and its affiliates of improperly buying seven of nine American Pharoahs lifetime breeding rights that were part of the collateral on a loan MGG made to Zayat Stables in 2016. Related:Zayat Lawsuit Documents Detail Sale Of American Pharoah To Coolmore. A. And if alleged fraud is uncovered in a bankruptcy filing, the Federal Bureau of Investigation can investigate, and the U.S. Department of Justice can prosecute if it believes a crime has been committed. She is a native Kentuckian who grew up in Garrard County. And hes a clean-cut, good, smart individual., The suit feels great! They have lived it three times in fact. While Zayat paid off some of the money owed, the bank contended that he remained in default on one loan. Ahmed Zayat (/zjt/; Arabic: ), (born August 31, 1962) is an Egyptian American businessman and owner of Thoroughbred race horses. Bank, visithttp://www.josbank.com/expert-advice. Rubinsky said he extended credit to Zayat with Tradewinds Sportsbook so Zayat could bet on horse races via a gambling website set up in Costa Rica. Furthermore, documents produced by Cedarview Capital Management LP indicated that the debtor's affiliation and/or ownership of Misr Glass continued well past 2011. Regarding the allegations of fraud in addition to breach of contract, the Zayats' attorney argues that all of MGG's allegations of fraud are actually purported misconduct related to the loan agreements. MGG's filing contained excerpts from email exchanges between Ahmed Zayat and MGG that date to Jan. 12, 2020, which was 10 days before MGG filed its bombshell lawsuit against him in a Kentucky court. Justin Zayat says he has been dreaming about this moment ever since he got his first taste of the horse racing industry. Not a subscriber? In late January MGG sued for $23 million, and during an emergency hearing Judge Kimberly Bunnell granted a motion ordering a receiver to seize control of Zayat Stables, including its horses. In many cases, the lawsuit is asking the court for the return of the horses; in others, the suit asks for a constructive trust for shares in potential offspring. "[53] That suit was dismissed on August 5, 2015. Emails from Zayat in mid-January indicate there remained confusion on this point. Justin Zayat is the racing manager for Zayat Stables, which was founded in 2005 by his father, entrepreneur Ahmed Zayat (left, talking to trainer Bob Baffert). MGG is a Delaware limited partnership based in New York. racing came on June 22nd, when Justin Zayat, resplendent in top hat and a morning suit, joined his wife, Michelle, to watch their USbased three-year-old colt Gidu finish sixth in the 500,000. It was a historic event Zayat and his family had been waiting for since 2005. Justin, a 2015 graduate of New York University, works closely with his father in the Zayat Stables business. [10] His daughters were the inspiration for the names of two race horses, stakes-winner Point Ashley, who in turn inspired daughter Ashley's costume jewelry business name; and Littleprincessemma, dam of American Pharoah. Download Today's Edition He his married to his wife Joanna and together the couple has four children together: Justin, Ashley, Emma and Benjamin. The Trustee's investigation also has revealed a substantial number of misstatements and omissions in the Debtor's bankruptcy schedules that were only uncovered through the issuance of Rule 2004 subpoenas to third parties, including overstatements of outstanding debt totaling hundreds of thousands of dollars. He has prestige. With having a decade of . Biase also raises questions about whether Zayat may have assets in his native Egypt. A judge can also deny the discharge of a particular debt. Ahmed Zayat and Justin Zayat accept the plaque commemorating American Pharoah's entry into the Hall of Fame To say the combined 2020/2021 Hall of Fame induction ceremony was surreal seems an. [5][8] Al-Ahram had been owned by the Egyptian government and Zayat had helped find American investors to take over government-owned businesses that had been nationalized by Gamal Abdel Nasser back in the 1950s. I did not disclose to you why we had to sell some assets in order for us to fund and continue to operate Zayat Stables and allowing myself the time to find the capital to get you paid in full. The emotion of the milestone victory physically overwhelmed Justin Zayat,. Eskendereya's estimated value at the time was between $6 and $8 million. [13] Zayat has horses at all stages of the racing process, stallions, broodmares, young horses in training and active racing stock. 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