Zayat files letter to judge overseeing his bankruptcy case
Ahmed Zayat, the prominent horse owner who has been sued by his main lender and who has filed for Chapter 7 bankruptcy, told the judge presiding over his bankruptcy case in a personal letter that his brother has been paying his legal bills and that he stopped paying his attorney because the fees were “over the quote we agreed.”
Zayat filed the letter to the U.S. Bankruptcy Court for the District of New Jersey one week after his lawyer asked to be allowed to withdraw from his representation of Zayat due to unpaid bills of $368,000. Zayat is being represented by Jay L. Lubetkin, a partner in the law firm Rabinowitz, Lubetkin, and Tully.
In his letter, which appeared on his own letterhead, Zayat said that Lubetkin told him in August 2020, just before he filed for bankruptcy, that representation in the case would cost “in the range of $150,000-$250,000.” He then said he asked his brother Sherif, who lives in Egypt, for financial help to pay the bills, and that the two brothers settled on a budget in that range.
Ahmed Zayat goes on to say in the letter that since his brother has already paid the firm $263,000 that he believes that Lubetkin “has been paid for his services to represent me.”
“The process that he agreed to a maximum of $250,000 he says now is costing $669,000,” Zayat wrote. “Is that reasonable billing in a chapter 7 bankruptcy case? Let alone the discovery that has not begun?”
Zayat acknowledges that the bankruptcy filing has been complicated by his lender’s lawsuit, which is seeking $23 million from him for defaults on his loans. The lender, MGG Investment Group, alleged in the lawsuit that Zayat concealed transactions from the company, and a trustee appointed by the court to examine Zayat’s assets and financial dealings has contested several maneuvers by Zayat.
Lubetkin said in his own filing seeking severance from his representation that “based on the approximate one-year relationship I have had with the debtor, I know the debtor to be an extremely intelligent individual who fully understands the Chapter 7 bankruptcy process.” Lubetkin added that he believed Zayat “is fully capable of representing himself in his main bankruptcy case and in the adversary proceeding.”
Zayat, who campaigned 2015 Triple Crown winner American Pharoah, told the judge in his letter that he did not know the proper path forward.
“How can I effectively defend myself against all those [matters] with a counsel compelled to stay in against his wishes who will no longer be possibly able to be zealous on my behalf, and on the other side of the coin how do I represent myself without counsel effectively,” he wrote. “It would also be hard for myself to find a chapter 7 lawyer that will represent me in this complex case, let alone without requiring a big retainer or fees paid in advance which I do not have.”
Zayat concludes his letter by writing, “I do not have a point of view as to what the right decision should be. I will leave that to you to decide.”