I remember he had a HUGE mess with Fifth Third Bank some years ago. Here we go again. Selling AP shares on the down low? Hmmmm…
And yet people are always happy to do business with him. :rolleyes:
Wow, some people just don’t know when they have it made. Life is much better and easier when you’re honest.
What a completely avoidable mess.
That’s what has me baffled! Seriously, this guy has quite a history and you somehow think YOU’RE the one he’s going to do right by?
How will this affect AP’s book? Or will it?
Will breeders be concerned about the uncertainty of where the stallion will ultimately land or does Zayat only have possession of some breeding shares at this point?
I could be wrong… I thought he only retained some breeding shares, but longer had any part of AP’s ownership.
Anyone else know more?
Unfortunately, it sounds like he’s a compulsive gambler. That is an addiction that can easily run through a fortune or two.
I’m sure that Coolmore CYA’d sufficiently in their contract, especially given that he has a tendency to be in financial straits.
The wording in the BH article is definitely confusing.
I checked the PR article which states Zayat sold 9 lifetime breeding rights to AP and pocketed $3.3M in proceeds.
Doesn’t say how many shares Coolmore (or others) own. Coolmore does stand AP.
Zayat… just wow, from a Lexington Herald Leader article
Zayat also is accused of secretly selling off and hiding proceeds from the sale of assets related to other horses including Bodemeister, Eskendereya, American Cleopatra, Grammajo, Danyelli, Lezendary, Old Glory, Lemoona, Amandrea, Ash n’ Em, Majid, El Kabeir, Zensational, Justin Philip and Prayer for Relief.
The actual ownership of the stallion is my question, not who holds breeding rights. We know who stands him. If Zayat has retained majority ownership this could become very complicated.
Wow is right, that is a whole lot of asset hiding. :yes:
More bad publicity coming for racing, at a time racing does not need it. This will make the mainstream press for sure.
The issue is that the shares were held as collateral against a bona fide loan. And he sold the shares on the shady. Not good.
I would actually be surprised if they do not try and find a criminal aspect to this, and take him down that way, but I am certainly not an attorney. However, fraud is fraud.
Yes, I think they will charge him criminally if they can (I’m not an attorney either.) They won’t look kindly upon his past.
I am wondering if Zayat retained ownership in the stallion proper. I remember he sold breeding rights before? the triple crown was achieved but can’t remember if he retained ownership or partial ownership of the horse.
My understanding is that Coolmore owns 100% of the horse, and Zayat/family owned 9 lifetime breeding rights. The breeding rights (worth…?) were used as collateral to secure a loan to keep his racing operation going (buying at sales? Training fees? Entry fees? Not sure?). He sold the breeding shares, and the loan was due in September. Now the collateral is gone, and lender wants their payment, seizing what other assets he has.
Zayat retained shares in all his retired stallions, and has a band of mares to support them. But he has a LONG, sour history of poor financial decisions and owes a lot of money. I, too, was surprised that he recovered from the 5th/3rd mess. That’s why a lot of people were quite unhappy to see American Pharoah win the TC… nothing against the horse, just his owners. It seems the AP cash ran dry rather quickly. Zayat also probably lost a bit if he was banking on selling his annual seasons to other stallions…POTN died, Bode sold overseas, Eskendereya (& others) left KY, etc.
This Racing Post article mentions the ownership interests in AP
According to the suit, Zayat Stables sold 100 per cent of the stallion shares in American Pharoah on January 16, 2015 – well before the colt’s Triple Crown run – to Orpendale, which is affiliated with Coolmore Stud and Ashford, for $23 million, with Zayat continuing to own the racing rights to American Pharoah.
I don’t understand how or why people think this way. It would never occur to me to do something like this, but I’m neither shady nor in the big business world. And if you’re lucky enough to get out of one big mess, why would you get into another one? Ego?
Unfortunately Zayat has found plenty of enablers in the TB world. Just last fall he was sued by one of his trainers who threatened to sell his horses at auction unless he came up with $600,000 in unpaid training bills. They reached a settlement and Zayat went on his merry way–but I’ve always wondered why the people who work with him are so willing to let his bills slide for months and even years at a time? Sure, he may get them a big horse or two–but these aren’t the small trainers he’s bilking, it’s guys at the top of the game. Do they need his business that badly that they don’t mind paying for it? This is the third time Zayat has landed in very public financial trouble. I hope it stops here.
As with most criminals… don’t think it through, don’t care if they get caught, think they won’t get caught…
Plenty of other ‘criminals’ who break laws that I wonder what they were thinking… not limited to business dealings and not limited to Zayat unfortunately.
He has to be running out of BNTs- and the others cannot be that crazy. One would hope…
Somehow, he has climbed out of this each time. That’s why I mentioned the criminal charge possibility. What else would stop him?
If I am the bank that had the AP shares as collateral, and he sells them, I want his guts for garters. If I am one of the people who bought those shares, I’m feeling a bit used, right now, and wondering if the bank is coming after ME!!
I’m sure the people who bought those shares did so in good faith (and probably had strong contracts or bills of sale). There’s no reason for the lender to come after them. The buyers paid Zayat (what would now be considered laughably low amounts for those breeding rights) but had no control over what he did with the money after that.
I understand this. My point to you is that much like a house that had a lien on it, or a mortgage, the liens and mortgage must be cleared in order to give clear title to the property. In this case the property was a season to AP. And those seasons were encumbered by being the collateral in a loan.
While I would also hope That the people who purchased the AP seasons will be unharmed by this, I have to wonder.