02/03/2010 12:00AM

Zayat files for bankruptcy


Ahmed Zayat's Zayat Stables, a leading racehorse owner, has filed for Chapter 11 bankruptcy as part of its dealings with Fifth Third Bank.

In U.S. Bankruptcy Court filings Wednesday in New Jersey, Zayat listed debts of between $10 million and $50 million but also declared Zayat Stables has assets in the same range, including such bloodstock holdings as the stallions Zensational and Pioneerof the Nile. According to the court documents, Zayat Stables filed for Chapter 11 protection "so that it can continue to operate its business and build on its successes for the benefit of all its creditors in the face of predatory lending practices by its primary secured lender, Fifth Third Bank."

Zayat ended 2009 as the nation's fourth-leading owner by earnings, with more than $6.3 million.

Zayat's filing names Keeneland as "an approximately $2.4 million secured creditor." Unsecured creditors include Darley Stud, Adena Springs, and trainers Bob Baffert, Nick Zito, and Steve Asmussen.

Fifth Third sued Zayat Stables last December, alleging Zayat owes the bank more than $34 million from loans he took out between 2007 and 2009. Zayat countersued, alleging predatory lending practices.