Zayat bankruptcy | Horse Racing Free Tips

Judge Orders Zayat Brother to Comply With Subpoena

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.

The post Judge Orders Zayat Brother to Comply With Subpoena appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

The Friday Show Presented By Monmouth Park: What’s The Deal With Zayat?

When attorneys representing Ahmed Zayat asked a U.S. bankruptcy court judge to let them drop out of the case because they allege the Eclipse Award-winning owner and breeder stopped paying them, some wondered why any law firm would represent an individual whose racing stable owed so much money to so many people.

We aren't experts on legal issues, so went to someone who is: Bob Heleringer, a Louisville, Ky., attorney and former state legislator who joins Paulick Report publisher Ray Paulick and bloodstock editor Joe Nevills to discuss the Zayat case. (Full disclosure: Heleringer said he represents trainer Rudy Rodriguez, one of several trainers to whom Zayat Stables owes money, according to court documents.)

While Heleringer's expertise is in equine regulatory law, he has some interesting comments and observations about the Zayat bankruptcy and the $23-million lawsuit filed against him by MGG Investment Group alleging fraud and breach of contract on a loan.

Joe and Ray review the performance by Jolie Olimpica, the Woodbine Star of the Week who carried the red and white Fox Hill Farm colors of the late Rick Porter to victory in last week's Grade 2 Nassau Stakes.

Watch this week's show, presented by Monmouth Park, below:

The post The Friday Show Presented By Monmouth Park: What’s The Deal With Zayat? appeared first on Horse Racing News | Paulick Report.

Source of original post

Claiming They Are Owed $368,272, Zayat’s Attorneys Want Out Of Bankruptcy Case

Ahmed Zayat, who filed for Chapter 7 bankruptcy last year after being sued by MGG Investment Group for allegedly defaulting on a $24 million loan, has stopped paying his attorneys, according to a court filing.

Jay L. Lubetkin, a partner in the Rabinowitz, Lubetkin & Tully law firm that has been representing Zayat in both the bankruptcy and MGG adversary proceedings, filed a notice with U.S. Bankruptcy Court in New Jersey on Monday seeking to withdraw from the case.

Lubetkin said Zayat has failed to fulfill his promise to keep outstanding invoices within 60-day terms and a subsequent promise to make minimum monthly payments of $50,000. Lubetkin said he tried communicating with Zayat “at least nine times” in July to discuss the status of payments but has not received a “substantive or satisfactory response” from the Eclipse Award-winning owner and breeder who campaigned 2015 Triple Crown winner and Horse of the Year American Pharoah.

Lubetkin said Zayat currently owes $368,273.33, not including billings incurred since June 29, 2021. Lubetkin said the last payment received was May 5, with outstanding bills now dating back to February of this year.

“If (Zayat) were to satisfy his previously expressed commitment to keep our receivables within 60-day terms,” Lubetkin wrote, “it would require an immediate payment of $232,899, and a further payment of $76,717 when the billing governing July's efforts is tendered.”

Lubetkin commented that the MGG Investment Group lawsuit is “in its earliest stages” and likely would not go to trial until the second quarter of 2022, at the soonest.

Zayat's “payment failures constitute a failure to substantially fulfill obligations to our firm,” Lubetkin wrote, “and the debtor (Zayat) has been given reasonable warning that we will have no choice but to withdraw unless those obligations were fulfilled. … Additionally, continuing representation of the debtor will result in an unreasonable financial burden on our firm.”

Zayat, Lubetkin added, is “an extremely intelligent individual who fully understands the Chapter 7 bankruptcy process, the nature of the claims being made against him by MGG Investment Group in its adversary proceeding seeking the non-dischargeability of the alleged debt due MGG Investment Group, the role of his individual Chapter 7 trustee, the role of the Chatper 7 trustee for Zayat Stables LLC, the prospect of an objection to discharge complaint being filed against the debtor by his individual Chapter 7 trustee and the prospect of a Section 523 complaint being filed against the debtor by the Stables' trustee. The debtor also understands the exemption available to his interest in residential real property, the exemption available to his ownership interest in home furnishings, and the impact of the real property and personalty appraisals obtained by his Chapter 7 trustee.

“Based on the debtor's intelligence and the detailed statutory and caselaw information which has been shared with the debtor,” Lubetkin concluded, “the debtor is fully capable of representing himself in his main bankruptcy case and in the adversary proceeding.”

The post Claiming They Are Owed $368,272, Zayat’s Attorneys Want Out Of Bankruptcy Case appeared first on Horse Racing News | Paulick Report.

Source of original post

Zayat’s Bankruptcy Lawyers Want to Sever Ties Over $368K in Unpaid Fees

The law firm representing Ahmed Zayat in his $19-million bankruptcy pleading asked a federal judge Monday for permission to walk away from the case based on Zayat's alleged non-payment of $368,273 to the firm in outstanding legal fees.

“The representation of the Debtor has consumed an extremely significant amount of the available resources of our firm,” wrote attorney Jay Lubetkin of Rabinowitz, Lubetkin & Tully, LLC, in a July 26 “motion to withdraw” filed in United States Bankruptcy Court (District of New Jersey).

“The Debtor has been consistently advised that absent satisfactory arrangements for the payment of the outstanding fees and expenses due to our firm and newly incurred billings, the firm would have no alternative but to seek to withdraw from representation of the Debtor,” Lubetkin wrote.

The purportedly insolvent owner and breeder of Triple Crown champ American Pharoah hired the firm when he filed for Chapter 7 bankruptcy protection nearly one year ago.

Lubetkin's firm has also been defending Zayat in an adversary proceeding filed against him by MGG Investment Group, LP, for allegedly obtaining a $24-million loan by fraud and then not repaying it. MGG wants that debt ruled as non-dischargeable.

Zayat's bankruptcy case has repeatedly been slowed by allegations from the trustee assigned to the case that Zayat and his family members have been uncooperative and obstructive as the trustee tries to trace millions of dollars in possibly fraudulent transfers.

Lubetkin wrote in his court filing that at the outset of their legal relationship, Zayat promised to pay what he owed in legal fees based on 60-day receivable terms. He later agreed to make at least $50,000 monthly minimum payments.

At the time of his initial bankruptcy filing in September 2020, Zayat told the court he had only $314.22 to his name.

Lubetkin wrote that Zayat has not paid his firm since May 5, 2021.

“If the Debtor were to satisfy his previously expressed commitment to keep our receivables within 60-day terms, it would require an immediate payment of $232,899 and a further payment of $76,717 when the billing governing July's efforts is tendered,” Lubetkin wrote.

“I attempted at least nine times during the month of July to communicate with the Debtor regarding status of payments to our firm, without substantive or satisfactory response by the Debtor,” Lubetkin wrote.

As for who might next represent Zayat, Lubetkin wrote in his filing that Zayat himself “fully understands the Chapter 7 bankruptcy process” and “is fully capable of representing himself.”

Lubetkin wrapped up his motion for withdrawal by noting that when he finally did manage to reach Zayat July 21, it seems as if Zayat tried to tell him he was fired before Lubetkin could quit.

“[W]hile not knowing what the Debtor's intentions were at the time of the communication,” Lubetkin wrote, “the Debtor requested that I write to the Court to advise my firm was 'no longer defending” the Debtor, which may be interpreted as the Debtor terminating his relationship with our firm.”

The post Zayat’s Bankruptcy Lawyers Want to Sever Ties Over $368K in Unpaid Fees appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post