The judge handling the Zayat Stables bankruptcy case has ordered Ahmed Zayat's brother, Egyptian businessman Sherif El Zayat, to comply with a subpoena that directed him to turn over documents relating to the family's businesses and finances.
This comes after Donald V. Biase, the trustee overseeing Zayat's bankruptcy case, charged last month that Zayat and members of his immediate family were engaged in “an exercise in gamesmanship, obstruction and delay” to prevent the trustee from having access to financial documents.
Blaise is clearly zeroing in on Sherif El Zayat because he suspects that Zayat has assets in Egypt that are being controlled by his brother. In his July filing, Blaise wrote: “Documents obtained by the trustee from third parties strongly suggest that the debtor still possesses significant assets in Egypt.”
Sherif El Zayat has been ordered to email all documents and information requested in the subpoena by Sept. 8. The brother has also been requested to take part in a video conference examination.
Blaise noted in June that the family members had made only “paltry productions in response to the subpoena directed to them.” Subpoenas seeking documents were issued to Zayat's wife, Joanne, three of his four children, and to JPZ Holdings, a company run by Zayat's son, Justin.
The attempt to subpoena Zayat's brother is trickier because he is not a U.S. resident or citizen and it appears that the court has only limited powers to enforce the subpoena. With that in mind, the judge, Vincent Papalia, wrote in his Aug. 25 filing that if Sherif El Zayat does not comply with the subpoena, the court will issue an order of contempt requiring a United States Marshal to detain Sherif El Zayat upon his arrival in the U.S.
Sherif El Zayat has been involved with a number of Egyptian businesses over the years. He is listed as the CEO of the investment firm Egypt Kuwait Holding. In his bio on the Egypt Kuwait Holding company website, it lists Sherif El Zayat as the founder and former CEO of Misr Glass.
Ahmed Zayat has said that he sold his assets in Misr Glass in 2010 or 2011 for about $2 million, but Blaise has questioned that. In July, he wrote that Zayat's affiliation with Misr Glass continued past 2011 and that in 2015 the company was sold to a third party for $93 million.
In the July memorandum, Blaise wrote that Zayat and family members had not provided information and documents regarding the sale of Misr Glass.
In April, MGG Investment Group, the company suing Zayat, charged that his brother loaned Zayat at least $1.5 million in 2020, which allowed him to maintain a “lavish personal lifestyle.”
Born in Cairo, Egypt, Ahmed Zayat formed an investment group that bought the Al-Ahram Beverages Company in 1997. His brother came on board as the managing director and deputy chairman of the beverage company.
Zayat filed for Chapter 7 Bankruptcy last September after Zayat and Zayat Stables were sued by MGG Capital Group for defaulting on a loan. The company won a $24.5-million summary judgment against Zayat in June 2020.
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