Ahmed Zayat, who campaigned 2015 Triple Crown winner American Pharoah under the Zayat Stables banner, has reportedly claimed to be on the brink of bankruptcy again, facing a US$23 million lawsuit that involves selling shares of the champion racehorse.
According to a Lexington Herald-Leader report filed Wednesday (January 22), a Fayette County judge will allow a third party to assume control of Zayat Stables after the New York-based MGG Investment Group says Zayat defaulted on millions in loans last September.
Zayat claimed in an email to MGG, made available in the lawsuit, that he has used “every dollar I have in America to fund the company until I find an investor to pay you in full.” Per the Herald-Leader, the lawsuit goes on to allege that Zayat exhausted his savings and “has resorted to seeking loans from friends, family, and even payday lenders.”
Because Zayat cannot allegedly continue properly funding Zayat Stables, MGG fears the organization’s value will dissipate, with his current equine holdings considered collateral.
According to the lawsuit, Zayat sold off multiple breeding shares to the Coolmore stallion American Pharoah, who also won the 2015 Breeders’ Cup Classic en route to Horse of the Year honors, and hid that money rather than using it to pay off his debts. Other Zayat Stables runners past and present, such as the stallion Bodemeister and Majid, a stakes winner in 2019, are similarly tied to the lawsuit.
Zayat previously filed for bankruptcy in 2010, after which Zayat Stables reorganized. But a reputation of legal issues and big bets has followed the high-profile owner, who made good on his dream to win the Kentucky Derby with American Pharoah. Court documents show that Zayat has spoken to the Fasig-Tipton sales company about dispersing his stock.
Meanwhile, Zayat Stables has remained active on the racetrack into the new year, winning the January 4 San Gabriel Stakes (G2) with Desert Stone at Santa Anita Park a week before Gidu earned a placing in Gulfstream Park’s Tropical Turf Stakes (G3).
