Zayat's attorney files motion to withdraw from bankruptcy case
Ahmad Zayat’s attorney in his bankruptcy case in New Jersey has filed a motion to withdraw as his counsel in the matter. The Thoroughbred Daily News first reported the filing, which was obtained by Horse Racing Nation.
Jay Lubetkin said in the Monday filing that Zayat owed his firm, Rabinowitz, Lubetkin & Tully, a total of $368,273.33 for services rendered before June 29.
The Chapter 7 case was filed in federal bankruptcy court in New Jersey in September, with Zayat claiming to owe more than $19.3 million. Zayat, best known as the owner of Triple Crown winner American Pharoah, claimed to have $1.8 million in total assets at the time.
“I attempted at least nine times during the month of July to communicate with the Debtor regarding status of payments to our firm, without satisfactory response by the debtor,” Lubetkin wrote in the filing.
Zayat did not return a request for comment from HRN.
According to Lubetkin, Zayat had promised to make monthly payments of $50,000 minimum, which he quit paying after May 5. The attorney claims that for Zayat to catch up on a commitment to keep receivables within 60 day terms, it would take a one-time payment of $232,899, plus a late payment of $76,717 for July’s work.
The filing said Zayat, when Lubetkin was finally able to make contact, implied that he was firing the firm.
“Continuing representation of the Debtor will result in an unreasonable financial burden on our form,” Lubetkin said. “The combination of the nonpayment for services performed for the Debtor from and after a portion February 2021 through today’s date, coupled with the dedication of such a significant amount of the capacity of the law firm to the representation of the Debtor, has caused material financial detriment to the firm.”
According to the filing, all but one of the firm’s attorneys had invested significant time in Zayat’s case.
The firm also has represented Zayat in an adversary proceeding involving the MGG Investment Group, which alleges fraudulently obtained a $24 million loan that he did not repay. The complaint in that case alleges that Zayat attempted to conceal the sale of Zayat Stables assets, which were allegedly used as collateral to get loans from MGG.