July, 2021 | Horse Racing Free Tips

Zayat Bankruptcy Trustee Alleges ‘Ongoing Pattern of Delay, Obstruction, and Gamesmanship’

Ahmed Zayat's attempt to get out from under $19 million in debt has reached yet another–and purportedly intentional–legal bottleneck.

The trustee assigned to the case is now alleging that three children and the wife of the financially strapped owner and breeder of Triple Crown champ American Pharoah are refusing to cooperate in providing documentation the trustee had subpoenaed from them to try and trace millions of dollars in possibly fraudulent transfers.

“[T]he Trustee's investigation reveals that the Debtor and his family members have engaged in a pattern of intermingling of assets and ongoing financial transactions among themselves,” the attorney bankruptcy trustee Donald Biase wrote in a July 13 filing in United States Bankruptcy Court (District of New Jersey).

“Notably, the [Zayats] have made only paltry productions in response to the subpoenas directed to them. Worse, their counsel has engaged in extensive redactions of the bank account statements they did produce based upon nothing but their own unilateral determinations of relevance, and has also simply omitted bank records for important periods,” the filing continued.

Ahmed Zayat's case seeking Chapter 7 bankruptcy protection has now dragged past the 10-month mark and has been hallmarked by the trustee's multiple allegations of stalling, evasion and non-cooperation. Zayat has repeatedly denied those claims via court filings.

The primary role of a court-appointed trustee in a bankruptcy case is to ensure that a debtor who files for federal bankruptcy protection is not hiding assets that could instead be used to pay creditors–many of whom in Zayat's case are Thoroughbred trainers for his now-liquidated racing stable and various racing- and bloodstock-related entities.

An objection to a bankruptcy protection plea can be filed if a trustee believes aspects of the required documentation are not on the up-and-up. A judge can either dismiss a case on his own or by acting on a trustee's objection. A judge can also deny the discharge of a particular debt.

If alleged fraud is uncovered in a bankruptcy filing, the Federal Bureau of Investigation can investigate, and the U.S. Department of Justice can prosecute if it believes a crime has been committed.

Back on June 4, the trustee issued a Rule 2004 subpoena to Zayat's wife, Joanne Zayat, and three of their four children, Emma, Benjamin and Justin Zayat. A business entity controlled by Justin, JPZ Holdings, LLC, was also subpoenaed.

Federal Rule of Bankruptcy Procedure 2004 authorizes the Trustee to investigate the “acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge.”

Specifically, the trustee wanted to see detailed information from the family's allegedly intermingled accounts with banks, credit card companies, other lending-related institutions.

The subpoena also wanted access to four TVG betting accounts “belonging individually to or jointly with, including as an additional or authorized user…any member of the Debtor's Family…or JPZ Holding,” as well as any passwords associated with such accounts.

On June 23, the four above-named Zayat family members (the “movants”) asked the court to quash the trustee's subpoena, alleging that “Each Subpoena is exceptionally broad and seeks wholesale financial records and other personal and proprietary financial information regardless of whether it has any relationship whatsoever to the Debtor or the Estate.”

In the trustee's July 13 memorandum in opposition to that proposed quashing, Biase contended that the motion to quash “is an exercise in gamesmanship, obstruction, and delay…. [T]hree of the Movants [Justin, JPZ Holdings and Joanne] were tied especially closely to the finances of the Debtor and to Zayat Stables.”

The filing continued: “Justin Zayat was the President of Zayat Stables, and so far as can be determined his sole source of income during the relevant period was Zayat Stables. Justin Zayat was also the beneficiary of nearly $1 million in transfers at a time when the financial condition of the Debtor and Zayat Stables were deeply troubled. Justin Zayat's company, JPZ Holdings, has also received millions of dollars in payments from the Debtor's brother and creditor, Sherif Zayat.

“Joanne Zayat, the Debtor's wife, was the recipient of over $1 million dollars of direct transfers from Zayat Stables. She is jointly named on every material bank account used by the Debtor, and is also a joint account holder with Justin Zayat.

“The accounts of Justin Zayat, Joanne Zayat and JPZ Holdings have been and are continuing to be used by the Debtor's brother, Sherif Zayat, to pay the Debtor's claimed $72,000 in monthly expenses. Joanne Zayat was also directly involved in obtaining loans from close friends and acquaintances for the benefit of the Debtor and/or Zayat Stables, and she has recently been repaying one of those creditors out of a bank account held in the name of her speech pathology business.

“In short, if the Trustee is to understand the conduct and financial transactions of the Debtor, he must necessarily obtain financial information relating to these third parties,” the filing contended.

The trustee further argued that the subpoenas at issue “are not only fully justified, but many are made necessary because the Debtor himself refused to produce records from a number of the financial institutions at which he has accounts.”

Biase explained the convoluted process by which Zayat, during the course of his bankruptcy plea, even directed the Trustee to serve his own financial institutions with subpoenas, “only to then have the Debtor's family members then move to quash those very subpoenas….”

“The Trustee's investigation also has revealed a substantial number of misstatements and omissions in the Debtor's bankruptcy schedules that were only uncovered through the issuance of Rule 2004 subpoenas to third parties, including overstatements of outstanding debt totaling hundreds of thousands of dollars.

“It is this ongoing pattern of obstructive activity, coupled with the Debtor's shifting and highly questionable statements in his schedules…that more than justified the Trustee's issuance of the subpoenas at issue. That same ongoing pattern of delay, obstruction, and gamesmanship requires that the Motion be denied in its entirety,” the filing stated.

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Taking Stock: Galileo, Coolmore, O’Brien and the Derby

By now you've read some of the many excellent remembrances and obituaries of Galileo (Ire), who was euthanized at Coolmore on Saturday at age 23. Any way you look at it, the son of Sadler's Wells was one of the greatest stallions of all time, as were his sire and and grandsire Northern Dancer. This dynastic sequence is now in its fourth generation with Galileo's outstanding son Frankel (GB), who is well on his way to matching the iconic status he achieved on the racetrack as a stallion, and history will note that in the year his sire died, Frankel got his first G1 Epsom Derby winner, Adayar (Ire). Frankel also happens to be responsible for the 2021 G1 Irish Derby winner Hurricane Lane (Ire), but for the scope of this piece, I'm limiting all discussion through the prism of the Epsom Classic to which all Derbys around the world trace. It is the oldest and most hallowed of them all, and Frankel's breakthrough in it seems only right, because Galileo has sired more winners of the race than any other stallion in its 240-year history.

An Epsom Derby winner himself, Galileo entered stud at four in 2002, and his first 3-year-olds raced in 2006. His five Epsom Derby winners through 16 crops of 3-year-olds are New Approach (Ire) (in 2008), Ruler of the World (Ire) (2013), Australia (GB) (2014), Anthony Van Dyck (Ire) (2019), and Serpentine (Ire) (2020).

In addition to Adayar for Frankel this year, New Approach's Masar (Ire) won in 2018, giving the Galileo branch of Sadler's Wells seven winners in the 16 years that Galileo has had foals old enough to contest the Derby.

New Approach is an accomplished sire, but Frankel, already with 17 Group/Grade 1 winners, is an exceptional one, and he's creating some history because it's a long-held view among pedigree historians that exceptional sire sequences last at most three generations before hegemony crumbles.

We're possibly witnessing this phenomenon in real time with the sequence of Northern Dancer/Sadler's Wells/Montjeu (Ire), for example. Like Galileo, Montjeu was a top-class racehorse and a great stallion in his own right, and with four winners of the Epsom Derby, he's tied with several others in second place. Had he not died early at 16, it's possible he'd have had more and been able to compete with Galileo, but to date he hasn't had a sire son like Galileo of the caliber of Frankel, though Camelot (Ire) is good.

Coolmore's Derby Dominance…

Sadler's Wells was raced by Robert Sangster and stood at Coolmore, and as outstanding as he was as a stallion, he didn't get his first Epsom Derby winner until he was 20, and that horse was Galileo. He did get a second winner in High Chaparral (Ire) the next year, but that was it.

Northern Dancer had three: Nijinsky (1970), The Minstrel (1977), and Secreto (1984). All of them were trained at Ballydoyle, the first two by Vincent O'Brien, and Secreto by Vincent's son David O'Brien. Secreto, who raced for Luigi Miglietti, famously upset his father's highly fancied Northern Dancer colt El Gran Senor, flying the Sangster silks, in 1984.

At that time, Coolmore boss John Magnier, whose wife Sue is Vincent O'Brien's daughter, was the junior partner in the Sangster/O'Brien group, but after O'Brien, who trained six Epsom Derby winners, retired from training in 1994, Magnier installed Aidan O'Brien (no relation to Vincent) as trainer at Ballydoyle in 1996. Two years later Galileo was born to the G1 Prix de l'Arc de Triomphe winner Urban Sea. He was bred on a foal share between David Tsui, who owned and raced Urban Sea, and Magnier's breeding entity Orpendale. The colt initially raced in Sue Magnier's colors and later in partnership with Michael Tabor. Derrick Smith arrived a few years later and together they comprise what we now call the Coolmore racing partners, with John Magnier the senior member.

The arrival of Galileo at the races coincided with the retirement of Montjeu and reignited the Derby fortunes of both Coolmore, where Sadler's Wells was aging, and Ballydoyle, which had gone through a dry spell between the two O'Briens. Montjeu had raced in Tabor's colors and had been trained by John Hammond, but from Galileo onwards, most of the Coolmore partners' big guns have been trained by Aidan O'Brien, including all the top Galileos–and there have been many.

Because of Galileo, Sue Magnier and Michael Tabor have been recognized as the owners with the most number of Epsom Derby winners, with nine–a mind-boggling achievement. Aside from Galileo (2001) and High Chaparral (2002) by Sadler's Wells, their winners (the later ones in partnership with Smith and others) are four by Galileo referenced earlier–Ruler of the World, Australia, Anthony Van Dyck, and Serpentine; two by Montjeu–Pour Moi (2011) and Camelot (2012); and one–Wings of Eagles (Fr) (2017)–by Pour Moi (Ire).

In the broader picture, each Derby winner is a member of the Sadler's Wells sire line, and keep in mind that these nine Epsom Derby wins have come over a period of 21 years, essentially meaning one every other year.

Aidan O'Brien…

Aidan O'Brien is the leading trainer of Epsom Derby winners with eight. He trained all of the above except for Pour Moi, who was trained by Andre Fabre, and he makes no secret of the fact that Galileo is the racehorse and stallion he holds well above any other.

Galileo gave O'Brien his first Derby and has supplied him as a sire with four others, so he knows what he's talking about.

In November of 2018, I made a trip to Ireland to specifically pay homage to Galileo and to speak to O'Brien, who at the time had won the Derby six times. The year before, O'Brien had won a record 28 Group 1 races, many of them with sons or daughters of Galileo, and I needed an explanation from the trainer to digest the sheer volume of gaudy numbers.

The first thing that struck me when I saw Galileo in the flesh was his size. He'd been listed at 16 hands but looked more like the 15.2 of his grandsire, whom he resembled in shape as well, if not as robustly made. But, even as an old man, he had a swagger to him and an intelligent eye that suggested a sound, bomb-proof constitution.

Meanwhile, Aidan O'Brien, who'd been at Ballydoyle for 23 years, still had a youthful appearance to him that belied his own experienced wisdom from learning about and training the great horse and his progeny for almost two decades. He's also unfailingly pleasant and polite and never fails to mention your name frequently in conversation.

When I asked him what is it about the Galileos, he said, “Sid, It's not about the exterior with them. It's not physical. It's a mental trait, Sid.”

And this is what he told me, which I'd published in this space two years ago but will reproduce again as it is poignant in remembering Galileo:

“Galileos are, like, very strange horses, meaning that they try so hard. And always with the Galileos, all you're trying to do is slow them down and relax them. With most other horses, it's the complete opposite. But Galileos, they never remember what happened yesterday. Say they got really tired–and when a horse gets really tired, they feel a bit of pain–some horses get very clever to that and they don't want to go back there anymore. So what happens is that when they start controlling that, you can only train them to a certain level because they won't let you push them any further. But with Galileos, they will give their absolute 150% every day. It's very strange. It's a mental trait, not a physical trait. Of all the horses we've ever trained, we've never seen it in another horse before. It's a gene that will carry on. It's a pure remind of him.”

That “try” that O'Brien described is a rare attribute that needs careful handling and development, something that could go awry without proper recognition and training. A lesser trainer, or one without an understanding of the Galileos, might squander what they see too early and overcook a horse before he's had a chance to show his potential, but O'Brien is meticulously patient in his handling of the Galileos, whom he oversees from as early as the time they are sent to Ballydoyle as yearlings in the autumn to be readied to race at two.

His is the type of symbiotic horsemanship that has brought out the best in the Galileos, and together they've had a mutually beneficial run that has lit up the record books.

O'Brien has won two more Derbys with sons of Galileo since my visit, and I wouldn't be surprised if he attempted to win a Gl Kentucky Derby with a colt from one of the stallion's remaining crops. It's something he mentioned to me, and as one of the architects of Galileo's success, he knows that it's a prize he'd like next to the great horse's name.

And, of course, the trainer will be looking to share a few more Derby wins at Epsom, too, with Galileo.

Sid Fernando is president and CEO of Werk Thoroughbred Consultants, Inc., originator of the Werk Nick Rating and eNicks.

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Bloodlines: Examining Galileo’s Place Among The Greats

The loss of Europe's greatest stallion, Galileo, on July 10 brought forth the question of where the exceptional racehorse and stallion ranks in the pantheon of the best of the breed. Although unquestionably the best sire in Europe, Galileo's ranking among the greats will require more time to fully understand.

For a broader perspective on a sire, the internationally known bloodstock commentator Tony Morris wrote in his informative book, Stallions, that we needed to wait 25 years to see a sire's long-term influence on the breed. That is distinct from the ranking and perceived importance during a horse's lifetime, when the immediate success of a stallion or a particularly fancy winner may shine a light on the horse that dims quite a bit over time.

In 1920, for instance, would anyone have expected that the influence of multiple leading sire Phalaris would far exceed that of his great predecessor St. Simon? Or that of any subsequent stallion? No. It was unthinkable and unforeseeable, but nonetheless, that is the bloodstock of today. The heirs of Phalaris.

Among the greatest of these is Galileo.

What we do know today is that Galileo rewrote portions of the record books with the excellence and volume of his better offspring. He sired winners of all the English, French, and Irish classics, including five winners of the Derby at Epsom. A winner of the English Derby in 2001, Galileo sired the Derby winners New Approach (2008), Ruler of the World (2013), Australia (2014), Anthony Van Dyck (2019), and Serpentine (2020).

No other stallion has sired so many, and that gift for classic expression among his many foals is likely to be the most telling of the many fine gifts that Galileo has left us.

To win a classic, especially the Derby, requires a horse to possess stamina, strength, courage, honesty, and the desire to win, along with a lilt of speed to meet the rising ground to the finish at Epsom. Galileo possessed all those and freely shared the same with his legions of sons and daughters.

Like his great sire Sadler's Wells and world-renowned grandsire Northern Dancer before him, Galileo had a quality, not just in his physique, which was very fine, but in his manner and self-possession, that set him apart. Perhaps it is asking a bit much for a horse to have self-awareness, but with Galileo and some other elite Thoroughbreds, there is something in their character and in their interaction with others, both human and equine, that is akin to such a perception.

Certainly, when I visited Banstead Manor outside Newmarket to see the unbeaten champion Frankel, the big bay son of Galileo showed an awareness and command of his situation that was inspiring. A leading freshman sire and now the sire of two Derby winners this year in Adayar (English) and Hurricane Lane (Irish), Frankel is a key component of the future legacy of Galileo, and a significant part of the enduring legacy is that Frankel possessed so much of the ephemeral but ever-important quality: speed.

Without speed, a Thoroughbred is at the mercy of any racer who does possess it, and Adayar particularly showed that trait in leaving his opponents toiling at Epsom.

In addition to Frankel's growing role in the Galileo legacy, 19 other sons of the great stallion have sired G1 winners around the world, largely in Europe, and mostly on turf. Will they spread round the world to dominate the breed and raise the influence of Galileo to an even greater level?

Time will tell.

For the immediate future, Galileo will have his final crop of foals born next year in 2022, and his final crop of classic performers will come in 2025. These and others will continue to swell Galileo's number of stakes winners past 338 over the next few years.

And for those of us who watch and wonder, what if (unlikely as it is), what if the best is yet to come?

The post Bloodlines: Examining Galileo’s Place Among The Greats appeared first on Horse Racing News | Paulick Report.

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Normalcy Returns as Saratoga Meet Opens

SARATOGA SPRINGS, N.Y. – Once again, Saratoga opens its world-renowned race meet with the question: How many?

During the COVID-19 summer of 2020, the issue was whether there might be some loosening on the ban on spectators during the 40-day season. That never happened, though a limited number of owners were allowed to see their horses run, and some of the world's best Thoroughbreds played to a oh-so quiet empty house at America's oldest race track.

With restrictions completely lifted in New York State in time for the 153rd season, the challenge of the week is to predict the size of the crowd that will attend the 10-race card on opening day Thursday. While the range varies, the consensus is: huge.

“I think the place is ready to explode,” said trainer H. James Bond. “Every phone call, every person that I talked to about Saratoga, everybody just can't wait to get here and get going. I think it's going to be a coming-out party like they've never seen before.”

New York Racing Association officials knew that enthusiasm for the 2021 meet was high even before they announced free admission on opening day for people who could prove that they are vaccinated. The free admission offer was announced after New York reached a 70% vaccination level in mid-June.

NYRA president and CEO David O'Rourke chuckled at the suggestion that it might be a Saturday-sized crowd on Thursday.

“That seems it's a really good way of putting it,” he said. “Yeah, I would think 30,000 plus, if I was to put a line on the number of attendance.”

This will be the third season to open on a Thursday since NYRA reworked the Saratoga schedule, moving to five-day weeks– Wednesdays through Sundays–and starting proceedings a week earlier in July. NYRA announced a crowd of 22,591 for the rainy opener in 2019.

Saratoga's opening day has long been a festive occasion at the track on the south side of Union Avenue. This time around, the excitement level is expected to be a few notches above the norm.

“I think it's going to be a little bit of a celebration, right?,” O'Rourke said. “Last year was a strange year, to put it lightly, for everyone and being up there, racing without fans. Now, to be able to welcome everyone back and in one way, celebrate the success we've had in terms of getting through this with the vaccination rates in New York, we figured it was a nice little gesture just to offer free admission as a celebratory kind of nod.”

Four-time Eclipse Award-winning trainer Chad Brown grew up in nearby Mechanicville and embraced racing at Saratoga Race Course. He is anxious to turn the page back to the Saratoga he knew before the pandemic and said he expects a special opening day.

“I've definitely been looking forward to it for a long time now,” Brown said. “I'm so happy everyone's going to be back and full capacity and things are looking pretty lively already.”

Brown said that the 2020 meet was sort of depressing.

“We tried to maintain some positivity because NYRA did offer the nice races up here,” he said. “We had a lot of nice horses to run and we won some big races, but it was so different to go through it with no fans there, no family there. It's just a very empty feeling throughout the meet, I think for everybody. Like I said, at the end of the meet last year, hopefully that's the only time we ever have to do that.”

As has been the case since the mid-1950s, the GIII $150,000 Schuylerville S. for 2-year-old fillies is the headliner of the opening-day program. It will be the 103rd running of the six-furlong race. The Schuylerville will be preceded by the GIII Quick Call S., the 5 1/2-furlong turf sprint for the sophomore set. Following the four-day opening weekend, Saratoga will have six five-day weeks and will complete its upstate New York run with a six-day week closing on Labor Day, Sept. 6.

The season will include 76 stakes worth a total of $21.5 million. Saratoga is the home to 20 Grade I stakes, the most of any track. The lineup this year includes the $600,000 Flower Bowl and the $1-million Jockey Club Gold Cup, which were moved from Belmont Park and will be contested on Saturday, Sept. 6. The $1-million GI Whitney S. is scheduled for Aug. 7 as the marquee race on a program with five stakes.

The GI $1.25-million Runhappy Travers S., the highest-profile race on the Saratoga calendar every summer, returns to its familiar late-season date on Aug. 28–it was moved ahead a few weeks to be prep for the GI Kentucky Derby in 2020–and will cap a program with six Grade I races. Belmont S.-winning trainer Brad Cox is aiming Godolphin's GI Belmont S. winner Essential Quality (Tapit) for the 152nd Travers, the oldest stakes for 3-year-olds in the U.S.

Essential Quality has been in Saratoga for a couple of weeks and worked four furlongs on :50.44 July 10. He is on course for the local Travers prep, the $600,000 GII Jim Dandy S. July 31.

Standing in front Essential Quality's stall this week, Cox, the 2020 Eclipse Award-winning trainer, acknowledged that it's nice to have a standout 3-year-old colt in the country in his care.

“Well, yeah, It's good,” he said, pausing a second for emphasis, “if they win.”

Cox said the gray son of Tapit will be on a Saturday work schedule for his Saratoga races.

“My job is to make sure everything's right for him,” Cox said, “and he's prepared, prepared properly and everything's going the way it needs to go and giving him every shot to succeed up here. And, so far, so good.”

On Friday, Aug. 6, Bob Baffert's 2015 Triple Crown winner American Pharoah–who lost in the Travers at the Graveyard of Favorites–will be inducted in the Hall of Fame at the National Museum of Racing. The other members of this year's class are trainers Todd Pletcher, who, like American Pharaoh, was elected in his first year of eligibility, and steeplechase trainer Jack Fisher.

The ceremony could not be held last summer, so the 2020 class will be inducted: racehorses Tom Bowling and Wise Dan; jockey Darrel McHargue; trainer Mark Casse; and Pillars of the Turf the late Alice Headley Chandler, J. Keene Daingerfield, Jr. and George D. Widener, Jr.

Pletcher's unbeaten stable star, Shadwell's 'TDN Rising Star' Malathaat (Curlin), is scheduled to make her first start since winning the GI Longines Kentucky Oaks in the GI Coaching Club American Oaks July 24. Pletcher won his 14th Saratoga training title, but said his current stable does not have the balance to get the job done this year. He said he is looking forward to a typical Saratoga season with thousands of people on the grounds.

“Well, I think it's going to feel normal again,” he said. “I think bigger question is like how strange did last year feel? Saratoga is the one place where we race that has the most electric crowd, the most enthusiastic crowd. The fans are very knowledgeable. It's what you've grown accustomed to your whole career and last year just didn't seem right. At the same time, we were blessed that we're able to continue racing and because of the television product, maybe hopefully we've gained some new fans. Maybe, you know, there was some silver lining to the whole thing, but it'll be nice to get back to normal.”

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