06/06/2010 11:00PM

Eskendereya proceeds go into escrow


Ahmed Zayat has retained an undisclosed number of breeding rights in Grade 1 winner Eskendereya and has placed proceeds from selling an interest in the colt into an interest-bearing escrow account as part of Zayat Stable's Chapter 11 reorganization.

In a June 4 filing in New Jersey bankruptcy court, Zayat said he could not disclose details of the Eskendereya sale, including what percentage of the colt Jess Jackson purchased or the price he paid in the private transaction, due to a confidentiality provision in the purchase contract. The reorganization plan's projected monthly income statement puts total income from horse sales in May 2010, the month Zayat and Jackson struck the deal over Eskendereya, at $7.5 million. According to the June 4 filing, the stable also has increased its projections of escrowed cash from horse sales, from an initial projection of $1 million to $8.3 million.

The court documents state that "the proceeds from the Eskendereya sale were consistent with the projected sales of horses in 2010."

Zayat Stables' reorganization documents project total income from horse sales to be $16.8 million in 2010, including proceeds from the Eskendereya sale.

Zayat Stables' reorganization plan must be approved by a select creditors' committee and the bankruptcy court.

Fifth Third Bank sued Zayat Stables late last year, alleging it owed more than $34 million in loan payments. Zayat has denied that and countersued, alleging predatory and fraudulent lending practices. The stable filed for Chapter 11 bankruptcy protection in February in response to Fifth Third's attempt to appoint a receiver and liquidate the bloodstock.