Trustee In Zayat Bankruptcy Cites Potential Assets in Egypt – Horse Racing News

Ahmed Zayat and his family celebrate American Pharoah’s Big Night at the Eclipse Awards in 2016

The trustee in charge of sorting the assets and liabilities of Ahmed Zayat, the Eclipse-winning owner of the 2015 Triple Crown champion American Pharoah, indicted in court documents filed Tuesday that Zayat and members of his immediate family are engaged in “An exercise in the game, obstruction and delay” to prevent the trustee from having access to financial documents.

Administrator Donald V. Biase made the accusations in a memorandum opposing a motion by members of the Zayat family to block subpoenas for the files of a number of financial institutions, credit card companies, credit and even betting accounts with TVG. The quashing motions were filed by Justin Zayat, Joanne Zayat, Emma Zayat, Benjamin Zayat and JPZ Holdings LLC.

Zayat filed for Chapter 7 bankruptcy last September after Zayat and Zayat Stables were sued by a lender, MGG Capital Group, for defaulting on a loan. The company won a $ 24.5 million summary judgment against Zayat in June 2020.

Even without many of the requested documents, Biase was able to trace a number of financial transactions he found questionable between Zayat Stables and Ahmed Zayat’s wife, Joanne, son Justin and other family members.

“The trustee’s investigation reveals that the debtor (Zayat) and his family members have engaged in a scheme of mixing assets and ongoing financial transactions between them, Zayat Stables, LLC and the debtor’s creditors,” indicates Biase’s memorandum.

Biase is also raising questions as to whether Zayat may have assets in his native Egypt. He cited statements by Zayat that he sold Egyptian company Misr Glass in 2010 or 2011 for around $ 2 million and no longer had any interest in the company. “However, despite the trustee’s request to register this transaction, none of these files have been produced to date,” wrote the trustee.

“Notably, in 2015, press reports show that Misr Glass was acquired by a third party for $ 93 million,” Biase wrote. “Further, documents produced by Cedarview Capital Management LP… indicated that the debtor’s affiliation and / or ownership of Misr Glass continued well beyond 2011.

“Documents obtained by the trustee from third parties strongly suggest that the debtor still has significant assets in Egypt,” Biase continued.

The trustee obtained on December 23, 2019 a communication from Zayat to a creditor stating: “Maybe it’s our turn to get things back to normal, and I will have the cash and funds I need.” to manage Zayat Stables without relying on our income and stakes in companies in Egypt that support this activity. “

Another note from Zayat to a creditor on Jan. 12, 2020, stated, “I personally pushed myself to the brink of bankruptcy by using every dollar I have in America to fund the business until I found an investor. to pay you in full. “

Biase observed: “In view of the foregoing facts, there is reason to believe that the debtor still has assets in Egypt, some of which are funds channeled to him by the debtor’s brother, Sherif, via accounts held in Egypt. name of JPZ Holdings (Justin’s company) and Joanne Zayat.

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