Prominent thoroughbred owner Ahmed Zayat has reached a global settlement with Fifth Third Bank that will ensure the bank is repaid the $34 million in loans it claims he defaulted on.
The agreement, filed on Thursday, will be considered by bankruptcy court on June 30. If approved, it would then go before the bank for confirmation on July 15.
``I'm tickled pink, actually,'' Zayat said. ``Now I can put this all behind me and focus on what I know I do better and that is managing my stable.''
The bank filed a lawsuit in December in U.S. District Court claiming that Zayat Stables defaulted on $34 million in loans. Zayat responded by filing for bankruptcy protection on behalf of the stable Feb. 3 to block the bank's attempt to take over the business.
Zayat put forth a preliminary plan in March that allowed him to keep his stables operational. In 2008, Zayat Stables was the leading thoroughbred owner by earnings, winning almost $6.9 million. Late in 2009, Zayat was in third place with more than $6.2 million.
Zayat said the reorganization plan, which will take about five years, will not hurt his racing business. He has stables in several states, including Kentucky, Florida and New York.
``We have always been leaner and meaner, always been efficient and effective,'' he said. ``We will do whatever we need to do. There are no restrictions.''
The repayment plan has already begun. Zayat used some of the money generated when he sold a share of early Kentucky Derby favorite Eskendereya to Jess Jackson to pare down the debt. The talented 3-year-old was retired in May after he had swelling in his left front leg.
The details of the sale were not made public, though Zayat said he received more than the valuation called for. The horse is recuperating on a farm in Kentucky and preparing for what could be a lucrative stallion career.
Zayat sees the agreement as a victory. He had maintained from the beginning of the legal battle that he planned to repay the debt, but simply needed time.
``They wanted to liquidate the company,'' he said. ``I wanted to weather the storm and expand and have a vision about it. ... I am committed to paying every single creditor of mine 100 percent,'' he said. ``I am sticking by that and my plan is calling for that.''
