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Still Embattled In Civil Suit, Ahmed Zayat Files For Chapter 7 Bankruptcy, Listing String Of Racing Creditors

Ahmed Zayat, best known in horse racing as the owner of 2015 Triple Crown winner American Pharoah through his Zayat Stables, filed for Chapter 7 bankruptcy protection on Sept. 8. Paperwork filed in United States Bankruptcy Court for the District of New Jersey lists a long string of trainers, veterinarians, transport companies, and others as creditors for expenses totaling tens of millions of dollars.

Unlike Chapter 13 or 11 bankruptcy, Chapter 7 does not involve the filing of a repayment plan. Rather, a bankruptcy trustee is appointed to gather and sell assets and pay creditors when possible. Some of the debtor's property may be exempt, but anything nonexempt will be liquidated.

A lengthy list of creditors attached to the filing revealed a number of horse trainers owed amounts in the six figures, among them Bob Baffert, who is owed $227,884.17, Brad Cox ($194,836.19), Mike Maker ($120,921.88), Richard Baltas ($316,070.12), Steve Asmussen ($102,541.10) and Todd Pletcher ($125,598.69). Rudy Rodriguez, who was awarded a judgment by a New York court for $394,437.19, is also listed. Jorge Navarro's JN Racing is owed $63,822.01.

Veterinary hospitals Hagyard Equine Medical ($38,999.53), Rood and Riddle ($54,346.77), and Kentucky Equine Medical Associates ($19,937.32) are also on the list, as are numerous therapists, individual veterinarians, van companies, and others.

Several financial advisement companies and individuals are listed, with notes they are owed six or seven figures each. One $250,000 debt is listed for the PMG Operating Account, whose address corresponds to Meadows Gaming.

Some, though not all, of these creditors' claims are marked as disputed.

Zayat and his racing operation were named in a civil lawsuit earlier this year in Fayette County Circuit Court from New York investment firm MGG Investments, stemming from a $30 million loan he took out in 2016. MGG won a summary judgment in the amount of $24.5 million earlier this year, representing the remaining balance Zayat Stables owes on the loan. Zayat Stables has countersued, and the bankruptcy paperwork listed the final amount owed to MGG as unknown for the moment. Control of Zayat Stables has been placed into the hands of a court-appointed receiver, who has raced a few of the stable's remaining horses and sold many of them, with an aim to maximize profit in the court of liquidating the operation.

Cedarview Capital, a New York hedge fund, is owed $7.9 million. In documents filed as part of the MGG suit, Zayat indicated he had paid over $1 million in interest to Cedarview, and stated it was one of the lenders he took on alongside MGG. In emails dated January of this year, Zayat claimed to have traveled to China in an attempt to attract investors to inject cash into the stable in order to “make the company fiscally functional” and to repay MGG and Cedarview.

In 2009, Zayat Stable filed for Chapter 11 bankruptcy protection after Zayat was sued by Fifth Third Bank for allegedly defaulting on $34 million in equine loans.

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Delaware Stewards Suspend Trainer Gaffney Through Remainder Of The Year For Numerous Rule Violations

Stewards in Delaware have suspended trainer Hubert Gaffney through the end of 2020 and issued a $2,500 for conduct detrimental to racing last week. The Aug. 31 ruling cites a long list of Delaware Thoroughbred Racing Commission rules Gaffney allegedly violated, including entering/aiding in the entry of ineligible horses, assuming responsibility for horses not in a trainer's own active care, conduct/utterance which adversely affects public confidence in racing.

According to the ruling, Gaffney's license had been granted conditionally due to a prior violation.

“Mr. Gaffney will no longer be entitled to a license at Delaware Park,” the ruling read. “Hubert Gaffney is denied access to all grounds under the jurisdiction of the Delaware Thoroughbred Racing Commission.”

Sarah Crane, investigator and acting executive director for the commission, indicated Gaffney is appealing the ruling and therefore the commission could provide no additional details about the source of the alleged rule violations.

As reported here on Aug. 20, Gaffney's name came up in the course of an investigation by the Maryland Jockey Club (MJC) as its officials examined the activities of Wayne Potts. MJC determined Gaffney had been serving as a program trainer for Potts at several tracks where Potts was not permitted to participate.

The complete ruling is available here.

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Hurricane Aftermath: Commission Orders Fair Grounds Open To Evacuees, Churchill Goes To Court

Last Thursday evening marked the second time this year that the Louisiana State Racing Commission has issued an emergency order related to stabling, reports nola.com. After a request from the Louisiana Horsemen's Benevolent and Protective Association, the commission ordered both the Fair Grounds in New Orleans and Louisiana Downs in Bossier City to take in Thoroughbreds from Evangeline Downs (Opelousas).

Hurricane Laura's path of destruction left Delta Downs, in Vinton, La., in bad shape, and though an evacuation order was in place for the area, as many as 500 Quarter Horses and their caretakers had nowhere else to go. All managed to survive the hurricane, but now many are in temporary stabling locations with nowhere to train.

Evangeline Downs ended its Thoroughbred meet this weekend, and the horses at the Opelousas track would normally shift to Delta Downs for the next Thoroughbred race meet, while Delta's Quarter Horse population would shift to Evangeline. Since Delta is not in any condition to host racing, there simply aren't enough stalls to accommodate both populations at the same time.

The commission's decision would send Evangeline's Thoroughbreds to the Fair Grounds, while the Quarter Horses would be able to take up residence at Evangeline. However, Churchill Downs, Inc., the Fair Grounds' parent company, has said that the New Orleans track is not prepared to take on horses at this time. The track is in the midst of preventative maintenance, New Orleans has been a hotspot for Covid-19, and hurricane season is not yet ended.

“We would love to help,” Fair Grounds attorney David Waguespack said during Thursday's commission meeting, according to crescentcitysports.com. “We're just not able to do what the Commission wants us to do.”

The commission's order included that both Fair Grounds and Louisiana Downs provide: stabling for the horses, “customary accommodations” for their caretakers, training hours, and the necessary security and maintenance staff.

On Friday, Churchill's lawyers lodged a legal challenge asking an Orleans Parish judge to halt the order. A hearing is scheduled for this Friday, Sept. 11.

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Buoyed By Larger Fields, Host Status For Kentucky Derby, Del Mar Sees Jump In Handle

Operating through challenges and uncertainty as a result of the ongoing pandemic, the 2020 summer race meet at the Del Mar Thoroughbred Club near San Diego, Calif., delivered impressive results on several fronts, including the continuance of its industry-leading safety record.

Despite not having fans on track due to the pandemic and running 25% fewer race days than in 2019, Del Mar finished its 2020 summer race meet with an 8% total wagering increase compared to its 2019 summer meeting. Wagering totaled $466.68 million in 2020, an increase of $34.71 million compared to the $431.98 million wagered during the 2019 summer meet. Average daily handle for the 27-day 2020 session was $17.28 million, an increase of 44% over the daily average of $12.00 million for the 36-day 2019 summer meeting.

On-line wagering in the state and across the country picked up markedly and overcame the lower wagering on-track and at California's satellite locations. California on-line wagering increased by 125% from 2019, while out-of-state betting grew 65%.

“Given the extraordinary circumstances, we are very pleased with our results. The racing product was first-rate and players around the country responded in-kind,” said Del Mar Thoroughbred Club's CEO, Joe Harper. “It is especially gratifying that we were able to achieve positive business results while maintaining our commitment to the health and safety of our workforce and our neighbors despite the obvious challenges.”

The track had run a 36-day meet racing five days a week over the past three years, but because of the environment surrounding the pandemic, cut back to 27 days this summer.

Due to the reshuffling of the Triple Crown calendar, Del Mar was the California wagering host for its first ever Kentucky Derby on Saturday, September 5. All told, Del Mar handled over $24.8 million on the day making it the fourth highest wagering day in its history.

Due to horse recruitment efforts and the support of California horse owners, Del Mar was able to increase field size from 8.0 runners per race in 2019 to 8.4 in 2020.

“This was a unique season on multiple levels, but once again our horsemen and women were outstanding,” said Del Mar's Executive Vice President for Racing, Tom Robbins. “They are a resilient group and we are extremely appreciative of their support. Together, we put on a terrific race meet.”

Del Mar's commitment to safety and welfare was on display once again as the track held one of the safest race meets in its history. In both 2018 and 2019, The Jockey Club's Equine Injury Database ranked Del Mar the safest major racetrack in the United States.

Top quality racing and hard-fought competition rose up throughout the summer season. Superstar Maximum Security returned to action for new trainer Bob Baffert and scored a pair of wins – one by a nose in the San Diego Handicap, the other in dominant fashion in the TVG Pacific Classic. Baffert unveiled his latest young superstar when Princess Noor won for fun in the Del Mar Debutante, then another future star came to light when Red Baron's Barn and Rancho Temescal's Dr. Schivel scored handily in the closing day Del Mar Futurity. Both those youngsters will be special to watch on down the line.

The battle for the Del Mar riding crown proved to be a season-long duel with two terrific riders – four-time champion Flavien Prat and the international newcomer Umberto Rispoli – hooked up in a fierce competition that went right down to the last day with Prat coming away a 50 to 49 winner by virtue of his score on Dr. Schivel in the Futurity. Trainer Peter Miller captured his eighth Del Mar training title when he saddled 28 winners over the course of the meet.

“There are so many people to thank for our success in this extremely unusual season,” said Josh Rubinstein, Del Mar Thoroughbred Club's President and COO. “On the business side want to extend our appreciation to our broadcast partner, TVG, for its dedication and professionalism in bringing our races to a national television audience and promoting our brand every day. We also owe a debt of gratitude to the family of backstretch workers here who helped make this meet a success as well as officials from the San Diego County Department of Health, Dr. Ghazala Sharieff and her expert medical team at Scripps Health, whose guidance was invaluable.”

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