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Zayat: Insurance Check Went to Stable

Bank has filed motions seeking a receiver for stable; Thorn Song still alive.

Horse owner Ahmed Zayat and trainer Mike Mitchell said Feb. 9 that the horse Thorn Song, for whom Zayat Stable received an insurance payment, is still alive in California.

Zayat, who filed for bankruptcy protection for his Zayat Stables on Feb. 3, confirmed that an equine insurance carrier paid a mortality claim of $2.75 million on the horse Thorn Song. He said Zayat Stable, and not not Fifth Third Bank, was the payee on the insurance coverage, which is the reason the money went into the stable account.

According to the Lexington Herald-Leader, Fifth Third Bank has filed court documents in relation to Zayat's bankruptcy, claiming that the payment on grade I winner Thorn Song was hidden from the bank. According to the newspaper, Fifth Third cites the Thorn Song incident to boost its case to have Zayat Stables placed in receivership. Fifth Third has sued Zayat to have the stable pay off $34 million in loans.

Zayat, which filed for Chapter 11 bankruptcy protection in New Jersey in an effort to stave off Fifth Third's request for receivership, has countered that the banks loan officers reneged on assurances that the stables loan would be continued.

Though he is precluded by his insurance contract from discussing specifics of an injury to Thorn Song and the subsequent insurance payment, Zayat said the horse is still alive. Following an injury in a July 25 race at Del Mar, Thorn Song subsequently foundered at a veterinary clinic, Zayat said. After adjusters for the insurance company examined the horse, they began processing the insurance claim, Zayat said. He said the horse is still alive but can provide no additional details under his contract.

However, Mike Mitchell, who trained for Zayat, did go into detail about Thorn Song and the confusion regarding his status.

"The horse had a really bad foot; he was lame after his last race at Del Mar," Mitchell said. "He had an abscess that we finally got to blow out, but it kept getting worse so we sent him to Alamo Pintado, which is the best place we have here in California to take care of a horse.

"He was foundering in his foot. The circulation was very poor. We kept getting reports that it was getting better, then it was getting worse; it was good, it was bad. Finally, the vets told us they were going to put him down and so the insurance company paid off on the horse. But then he started to improve and they decided to keep the horse.

"As far as I know, he is alive and doing well. He is at Alamo Pintado now and he could stand. I think the insurance company took ownership of the horse.

"My boss, Mr. Zayat, spent a lot of money to keep the horse alive and safe. He did everything an owner is supposed to do."

Zayat said the insurance payment, which was valid under terms of his coverage, went to the stable, as did all other such payments, in the course of the stable's business.

The Herald-Leader also reported that Fifth Third had filed documents showing that Zayat has significantly dropped the amount of insurance coverage he had on his horses, from $25 million in June 2009 to a current level of $7.5 million.

Since last June, Zayat Stables has retired horses that comprised a large part of his insurance coverage and that the amount of insurance carried on other horses has been decreased in keeping with the lower appraised values of the horses, Zayat said.

A hearing on the Fifth Third motion for a receiver has been scheduled for March 8 in bankruptcy court in New Jersey.

In a related matter, the bankruptcy court has approved Zayat Stable to use up to $1,040,892 for stable operations through March 8. The funds, which are cash collateral from Keeneland and Fifth Third Bank, can be used by the stable on an interim basis, the Herald-Leader reported. The newspaper reported that Fifth Third opposed the motion for Zayat to use the money.