Prominent horse owner Ahmed Zayat and Fifth Third Bank have reached an agreement allowing Zayat Stables to use cash on hand for racing operations in accordance with a budget submitted to a bankruptcy court in New Jersey.
In a statement released March 3, Zayat also said Fifth Third has allowed the stable use of a line of credit upon which to draw in order to conduct normal business. Under terms of the agreement, Zayat was required to provide the bank with a term sheet detailing a schedule for the repayment of Zayat Stables' overall bank loans, according to Zayat.
Under the process, Fifth Third will respond with its own term sheet, which will be followed by a negotiation period "with the goal of the two parties to resolve their differences and reach a global settlement."
Fifth Third has sued Zayat, who has more than 200 horses, in an effort to recover more than $34 million in loans made to the stable. In response to the bank’s lawsuit, Zayat filed for Chapter 11 bankruptcy protection and has said he will propose a reorganization plan that will permit the stable to continue to operate and eventually pay off the bank’s loans.
Among the horses campaigned by Zayat is leading Kentucky Derby Presented by Yum! Brands (gr. I) contender Eskenderaya.
"I am pleased to have reached this interim agreement with Fifth Third as it is important to both of us that Zayat Stables focus on the business at hand," Zayat said in a statement. "It is my hope and desire that this temporary respite will allow us to resolve our differences to our mutual satisfaction."