Ahmad Zayat and his family celebrate Pharaoh’s Great American Night at the Eclipse Awards in 2016
A bankruptcy trustee tasked with sorting out the assets and liabilities of Ahmed Zayat, the Eclipse-winning owner of 2015 Triple Crown American Pharoah, accused in court documents filed Tuesday that Zayat and his immediate family were engaging in an “exercise” in games, obstruction and delay “to prevent the trustee from accessing financial documents .
Regent Donald F. Biasi made the accusations in a memo opposing a proposal by members of the Zayat family to block subpoenas for records from a number of financial institutions, credit card companies and even betting accounts with TVG. Cancellation requests were submitted by Justin Zayat, Joanne Zayat, Emma Zayat, Benjamin Zayat and GBZ Holdings LLC.
Zayat filed for Chapter 7 bankruptcy last September after Zayat and Zayat stables were sued by lender MGG Capital Group for defaulting on a loan. The company won a $24.5 million summary judgment against El Zayat in June 2020.
Even without the many required documents, Bayasi was able to trace a number of financial transactions he found suspicious between Zayat’s stables and Ahmad al-Zayat’s wife, Jawan, his son Justin and other family members.
“The trustee’s investigation reveals that the debtor (Al-Zayyat) and his family members have engaged in a pattern of overlap between the assets and financial transactions going on between them, Al-Zayat Stables Company, LLC, and the debtor’s creditors,” according to Beyaz’s memo.
Biase also raises questions about whether Zayat may have assets in his native Egypt. He cited statements from El-Zayat that he sold Misr Glass Company in 2010 or 2011 for approximately $2 million and no longer had any interest in the company. “Despite the trustee’s request for records of this transaction, no such records have been produced to date,” the trustee wrote.
“In particular, in 2015, press reports showed that a third party had acquired Misr Glass for $93 million,” Biasi wrote. Furthermore, documents issued by Cedarview Capital Management LP … indicated that the debtor’s affiliation and/or ownership of Misr Glass continued after 2011.
“Documents obtained by the trustee from third parties strongly indicate that the debtor still owns significant assets in Egypt,” Bayazi continued.
The trustee obtained a letter dated December 23, 2019 from Al-Zayat to one of the creditors stating: “Maybe it is our turn for things to return to normal, and I will have the proper liquidity and funds that I need to run Al-Zayat stables without relying on our services. Income and ownership of the companies in Egypt that were supporting this commercial activities “.
Another note from Zayat to a creditor stated on January 12, 2020: “I personally pushed myself to the brink of bankruptcy by using every dollar I had in America to fund the company until I found an investor who would pay you in full.”
Bayaz noted: “Given the foregoing facts, there is reason to believe that the debtor still has assets in Egypt, some of which is money being transferred to him from the debtor’s brother Sharif through accounts held in the name of JPZ Holdings (Justin Zayat Company) and Joan Zayat.”
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