A bankruptcy court judge approved the settlement between Ahmed Zayat's Zayat Stables and Fifth Third Bank in Newark, N.J., bringing to a close a widely-publicized case.
According to a statement from Zayat, the settlement came after Fifth Third committed to vote in favor of Zayat’s plan of reorganization at the confirmation hearing before the bankruptcy court on July 15 in Newark, New Jersey.
"I am thrilled that the judge has approved the global settlement that was proposed to the court between us and Fifth Third," Zayat said in a statement.. "This is a huge step forward, not only for Zayat Stables, but for the entire equine industry. With all outstanding matters finally resolved, we can keep our focus where it needs to be—on breeding and racing some of the top horses in America."
Under terms of the settlement, Fifth Third, which sued Zayat Stables for more than $34 million late last year, will vote to approve the stables' Chapter 11 reorganization plan in a bankruptcy court hearing July 15.
Zayat filed a countersuit against the bank, alleging deceptive and predatory lending practices. Zayat contended that equine lenders in Fifth Third's Lexington offices agreed that the loan would be continued, but those assurances were rejected by executives at Fifth Third headquarters. Zayat contended he could have sold horses to satisfy his loan payments, if he had been notified the loan was not being extended.
Zayat Stables filed for bankruptcy in a move to protect its assets after Fifth Third tried to appoint a receiver for the stable's runners.