07/15/2010 3:24PM

Court approves Zaay Stables bankruptcy plan


A New Jersey bankruptcy court has approved Thoroughbred owner Ahmed Zayat’s Chapter 11 reorganization plan for his Zayat Stables.

The approval follows a settlement last month between Zayat Stables and Fifth Third Bank, which sued Zayat late last year for more than $34 million, alleging the stable had defaulted on a series of loans. Zayat Stables filed for Chapter 11 bankruptcy in February to protect its assets from the bank’s attempt to appoint a receiver, and in April Zayat filed a countersuit alleging the bank had practiced deceptive and predatory lending.

Under terms of the settlement announced June 30, Fifth Third had agreed to vote to approve the stable’s current reorganization plan.

The court’s approval came at a July 15 hearing in Newark, N.J.

“I feel as though we’ve reached the light at the end of the tunnel,” Zayat said in a statement. “While Chapter 11 was a necessary step to take, Zayat Stables has emerged stronger, and we are excited about building on our many recent successes in the racing industry.”

Fifth Third attorney Craig Robertson did not immediately return a call seeking comment.