Ahmed Zayat files for Chapter 7 bankruptcy

Ahmed Zayat, whose racing stable is currently being sued by an investment company that loaned him tens of millions of dollars, has filed for Chapter 7 bankruptcy, according to a court filing.

The filing, which was first reported by Thoroughbred Daily News, lists assets of approximately $2 million and liabilities of nearly $20 million. Chapter 7 bankruptcy, which is also known as liquidation bankruptcy, generally requires the disposition of nearly all assets from the debtor in order to pay off creditors.

The filing also reports that Zayat Stables, the racing company owned by Zayat and his family, has $4 million in assets and $22 million in secured debt, with an additional $4 million in unsecured debt. Zayat Stables is the entity that was sued earlier this year by an investment bank, MGG Investment Group, which claimed that Zayat had misrepresented his assets and defaulted on loans totaling $23 million.

The Chapter 7 filing lists 132 individuals and companies who are owed money under the category of “unsecured debt.” The filings name eight trainers who are all owed money, but the filing lists those debts as “disputed.” The trainers include both Rudy Rodriguez and Mike Maker, who have separately filed lawsuits against Zayat for unpaid debts, as well as Richard Baltas, Bob Baffert, Brad Cox, Todd Pletcher, Steve Asmussen, and D. Wayne Lukas.

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Zayat, who has purchased tens of millions of dollars of racehorses at auction in the past decade, also has debts listed to Brook Ledge Horse Transport for $163,000, and debt of almost $400,000 to various veterinary clinics across the country.

In June, Fayette County Circuit Court Judge Kim Bunnell released a summary judgment stating that Zayat Stables had breached its contract with MGG and that the company could pursue $24.5 million from the two main principals of the stable, Ahmed Zayat and his son Justin. Zayat Stables, which has started 29 horses this year and has earnings of $305,613, is currently under the control of a court-appointed receiver.

Eleven years ago, Zayat Stables was sued by another bank that claimed he had defaulted on $34 million in loans. As a result of that suit, Zayat Stables was reorganized under a Chapter 11 bankruptcy filing. Five years later, Zayat Stables won the first Triple Crown in 37 years with American Pharoah, and the Zayat family again began spending lavishly at auctions after the colt was sold to stud.

Throughout his racing and breeding career, Zayat has been dogged by accusations that he frequently disputed the size of his unpaid bills or ignored repayments altogether. The 2020 lawsuit filed by MGG contained allegations that were strikingly similar to those in the suit filed by his bank in 2009.