Zayat files for Chapter 7 bankruptcy protection

Ahmed Zayat, an Egyptian businessman and Thoroughbred owner-breeder who campaigned 2015 Triple Crown winner American Pharoah through Zayat Stables LLC, filed for Chapter 7 bankruptcy protection on Tuesday in U.S. Bankruptcy Court for the district of New Jersey.

In forms submitted to the court, Zayat summarized his assets, including personal property and real estate, as more than $1.8 million, while his liabilities are listed as more than $19.3 million. The filing said he has 99 to 199 creditors.

A Chapter 7 bankruptcy does not include a repayment plan as other forms do. A trustee instead gathers a debtor's nonexempt assets and liquidates them to pay creditors.

Zayat's top debts not secured by collateral include $7.9 million to an entity listed as Cedarview, $1 million to Barbara K. Flohlich and $878,000 to Yellowstone Capital Partners LLC.

Zayat Stables has earned over $57.6 million all-time on the track dating back to 2005 according to Equibase. Its best year was 2015 when it earned over $10 million.

Besides American Pharoah, Zayat Stables' other top horses include millionaires Pioneerof the Nile, Justin Phillip, Prayer for Relief and Thorn Song, along with Grade 1 winners Bodemeister and Eskenderaya.

The bankruptcy protection filing is not the first time Zayat has found himself dealing with the courts. In February, Zayat and his stable were the subjects of a lawsuit claiming that he wrongly sold the breeding rights to American Pharoah among other horses while using them as collateral to get a $23 million loan from MGG Investment Group, which filed the lawsuit.

That lawsuit, which forced Zayat’s racing operations into receivership, is still active in the Kentucky courts system.

In the bankruptcy protection filing, Zayat lists Zayat Stables LLC as “insolvent” and sets its value at $1.