Ahmed Zayat

Ahmed Zayat
Ahmed Zayat (center) at the 2015 Preakness Stakes
Occupation	Industrialist and horse breeder
Born	(1962-08-31) August 31, 1962 Cairo, Egypt
Major racing wins
American Classic Race wins Kentucky Derby (2015) Preakness Stakes (2015) Graded Stakes Wins Arkansas Derby (2012, 2015) Haskell Invitational (2012) Wood Memorial Stakes (2010) Ballerina Stakes (2010) Frizette Stakes (2010) Norfolk Stakes (2010) Fountain of Youth Stakes (2010) Pilgrim Stakes (2009) Triple Bend Invitational Handicap (2009) Bing Crosby Handicap (2009) Pat O'Brien Handicap (2009) CashCall Futurity (2008) Robert B. Lewis Stakes (2009) San Felipe Stakes (2009) Santa Anita Derby (2009) Shoemaker Mile (2009) Shadwell Turf Mile (2008) Del Mar Debutante (2006) La Brea Stakes (2006)
Significant horses
Pioneerof the Nile, Eskendereya, Zensational, Nehro, Z Fortune, Z Humor, Bodemeister, Paynter, American Pharoah

Ahmed Zayat, (born August 31, 1962), is an entrepreneur and owner of Thoroughbred race horses. He was born in Cairo, Egypt to a well-off Jewish family. At the age of 18, he moved from Egypt to the United States. He got his Master's degrees in business and public health from Boston University. He and his family are Orthodox Jews. He currently lives in Teaneck, New Jersey with his wife Joanne. They have four children ranging in age from their eldest, Justin, who helps run the Zayat Stables operation, to Emma, the inspiration for the name of LittlePrincessEmma, dam of American Pharoah. He currently serves as the CEO of Zayat Stables, LLC, a thoroughbred horse racing company with stables all over the country. One of his horses is 2015 Kentucky Derby and Preakness Stakes winner American Pharoah.

Early career and personal life

Zayat was born in Egypt in 1962 to an affluent Jewish family and grew up in a suburb of Cairo called Maadi. It was an ethnically-mixed community and as a young man Zayat learned to ride horses. His father was a doctor and his grandfather was a writer. He first was exposed to Thoroughbreds in his early teens while competing in show jumping. He came to the United States at the age of 18, and earned an undergraduate degree from Yeshiva University. He obtained a master's degree in public health administration from Boston University. After graduation, he worked in New York City in commercial real estate.

He returned to Egypt in 1995 and formed an investment group. They purchased the Al Ahram Beverages Company in 1997. The beer company had been owned by the Egyptian government and Zayat had helped them find American investors to take over government-owned businesses that had been nationalized by Gamal Abdel Nasser back in the 1950s. Under Zayat's ownership, additional brands of beer were introduced and Zayat also sold a non-alcoholic beer designed form the Muslim market. The company was modernized from a run-down operation to a publicly-traded business that sold in 2002 to Heineken for $280 million.

Zayat continued to run Al Ahram until 2007, but periodically returned to the United States, where he started buying racehorses and formed Zayat Stables in 2005. His motivation to return to the US was, in part, to commute less and be more involved with his family and children. Upon leaving Al Ahram, he declared that he was "retiring", but as his wife explained, "he can’t be retired for more than 15 seconds," and he soon expanded his horse operation to include both breeding and racing stock. He still owns other business interests in Egypt, including being the majority shareholder of Misr Glass Manufacturing, which is Egypt's largest maker of glass containers.

Zayat lives in Teaneck, New Jersey with his wife, Joanne. The couple have four children: Justin, Ashley, Benjamin, and Emma. The girls were the inspiration for the names of two race horses, Point Ashley, who in turn inspired daughter Ashley's costume jewelry business name; and Littleprincessemma, dam of American Pharoah. Justin, a 2015 graduate of New York University, works closely with his father in the Zayat Stables business. Race horse Justin Phillip was named for Justin. The Zayats also have residences in New York, Egypt, and London. The family are Orthodox Jews; Zayat's Hebrew name is Ephraim, and he donates to Jewish schools and charities, including those that help special needs children.

Zayat Stables

American Pharoah

Zayat first began buying Thoroughbred race horses in 2005. His business base for his stables is Hackensack, New Jersey, but Zayat's horses live in different locations across the US. His horse breeding stock live mostly in Kentucky, young horses are started in Florida, and he utilizes many different horse trainers. He owns about 200 horses.

In 2008, Zayat was North America's Leading Owner by earnings. Six times Zayat Stables LLC has ranked among North America's Top five owners. Three times since 2008, Zayat has raced the Kentucky Derby (G1) runner-up; in 2012, stable runners ran second in all three legs of the Triple Crown, the Derby, Preakness and Belmont.

Zayat has experienced significant highs and lows in horse racing. In 2010, Zayat campaigned Eskendereya, winner of the Wood Memorial (G1) and considered by many to be the heavy favorite for the Kentucky Derby. On the Sunday prior to the Derby, Eskendereya was withdrawn from the race and subsequently retired to stud due to a leg injury. In 2012, Bodemeister, who many believe was the class of the three-year-old crop, finished a narrow second place in both the Kentucky Derby and Preakness Stakes. His top colt Paynter developed near-fatal complications from colitis after winning the $1,000,000 Haskell Invitational (G1). This colt would go on to win the NTRA Moment of the Year Award and Secretariat Vox Populi Award before returning to the races in June 2013. Conversely in 2013, Zayat's 2011 Kentucky Derby (G1) runner-up Nehro died of colic en route to the hospital. Zayat's horses include 14 Breeders' Cup contenders, 11 Grade 1 winners, and five Eclipse Award finalists. These include: 2013 Breeders' Cup runner and 2012 Haskell Invitational (G1) winner Paynter; 2013 Breeders' Cup Hopeful Fast Bullet (G2); 2012 Arkansas Derby (G1) winner and Kentucky Derby runner-up Bodemeister; 2009 Santa Anita Derby (G1) winner and red-hot young sire Pioneerof the Nile; 2009 triple Grade 1 winner Zensational;2009 Shoemaker Mile (G1) winner Thorn Song; 2010 Norfolk S. (G1) winner Jaycito; 2010 Frizette (G1) winner A Z Warrior; 2010 Ballerina S. (G1) winner Rightly So; Grade 1 winner and 2007 Keeneland January Sale Topper Point Ashley.

Ahmed Zayat's family, including son and manager of Zayat Stables racing operations, Justin Zayat, at the 2015 Preakness Stakes

Zayat's Paynter at the 2012 Belmont Stakes

Racing silks of Zayat Stables

Zayat Stables has approximately 200 horses, most of which are in training spread among such trainers as Todd Pletcher, Bob Baffert, Steve Asmussen, Tony Dutrow, Mike Mitchell, Reade Baker, and Scott Lake. They were the seventh leading buyer at the 2010 Keeneland September yearling sale, having spent $2,655,000 for 14 yearlings. The original focus of Zayat's operation was to develop racing and breeding prospects, with long-range plans to acquire companies involved in equine health research and product development as well as the possibility of racetrack ownership. Ahmed made splashy, big-ticket purchases starting in 2005, including Maimonides, purchased at Keeneland as a yearling in 2006 for $4.6 million, by the late Vindication, who is a half-brother to Grade 1 winners El Corredor and Roman Ruler. In addition, Ahmed purchased the sale topper at the 2006 Fasig-Tipton Saratoga select yearling sale, a filly by Empire Maker, for $1,600,000, named Mushka. Zayat Stables keeps about 20 broodmares in Kentucky.

In 2009, Zayat's homebred Pioneerof the Nile started a streak of Zayat horses finishing second in the Kentucky Derby, and other classic races when the colt was defeated by Mine That Bird. In 2010, Zayat's pre-race favorite Eskendereya was withdrawn from the Derby six days before the race with a leg injury.

In 2011, Zayat had a horse in the 137th running of the Kentucky Derby. The horse, Nehro, was originally at the 19 post, but since one of the favorites, Uncle Mo, dropped out a few days before the race, Nehro moved to post 18. He opened 6-1 odds and had 8-1 final odds, only behind Dialed In (4-1 open; 5-1 final). Nehro finished in second place, behind Animal Kingdom, who came up on the outside, passing 3 horses in the last stretch, to win by 2+3⁄4 lengths. For the 138th running in 2012, Zayat Stables' Bodemeister set fractions of :45 1/5 and 1:09 4/5 before finishing second to I'll Have Another. Bodemeister would also lose the Preakness by a neck to the same horse. Then running Paynter for the Belmont Stakes, who also finished second to Union Rags. He owned the horse American Pharoah that won the 2015 Kentucky Derby and the 2015 Preakness Stakes.

Controversies

In December 2009, Zayat was sued by Fifth Third Bank for an alleged $34 million in unpaid loans. He had taken out multiple loans from the bank totaling over $38 million between 2007 and 2009. Fifth Third alleged that Zayat was in default because he failed to make two payments in 2009. As part of the loan package, the bank had a security interest in Zayat Stables' horses, prize money, stallion shares, and stallion income. Further, the bank added an amended provision to its later loans stating, "if Zayat Stables defaulted on any of the Notes, such default would be considered a default under all of the notes thereby entitling Fifth Third to accelerate the principal balance and all accrued interest due and owing under all of the Notes." While Zayat paid off some of the money owed, the bank claimed that he remained in default on one loan. The bank further claimed that Zayat had lost $52 million between 2006 and 2008, and it attempted to foreclose on his horses. Zayat filed for Chapter 11 Bankruptcy protection in February 2010. He stated that the problem was that the Lexington branch of the bank worked with the Thoroughbred industry and was willing to restructure his loans, while the bank's corporate headquarters in Cincinnati wanted to get out of the equine lending business altogether. Stating that Fifth Third was “reneging on its promises,” Zayat filed a countersuit in April 2010, alleging the bank engaged in deceptive and predatory lending practices. When he thought the bank was willing to restructure its loans, Zayat withdrew 67 horses he intended to sell at Keeneland's 2009 September and November sales and instead purchased 24 more yearlings. He had also paid Fifth Third $4.3 million from the proceeds from the sale of breeding rights to Zensational, all of which left him low on cash when the bank called in its loans. Zayat said the bank was using "scorched earth" tactics and accused it of trying to put him out of business, explaining that had he known the bank would not extend his loans, he would have sold enough horses to make his payments.

All cases were resolved with a settlement agreement in July, 2010, seven months after the initial suit was filed. Zayat agreed to pay off his unsecured creditors over two years, without interest, and pay off Fifth Third by 2014. He owed about $2.4 million to the Keeneland Association, and $1.2 million to other creditors. His creditors included several trainers, including Bob Baffert, veterinary clinics, horse transport companies, and boarding farms. He also owed several horse breeders for stud fees. To settle his debts with Fifth Third, he agreed to annual payments based on a percentage of horse sales and proceeds from claiming races. As part of his reorganization plan, he was to sell a number of horses, including 100% of his Grade I-winning horse Eskendereya. Ultimately, consistent with Zayat's tendency to retain a financial interest in his stallions, he sold an undisclosed share in the stallion to Jess Jackson and retained some breeding rights. While the selling percentage and price were confidential, Zayat Stables' reported income to the bankruptcy court for the month the deal closed was $7.5 million. Zayat stated, “While Chapter 11 was a necessary step to take ... I look forward to carrying out our reorganization plan, and continuing to develop some of the best horses in the country.”

Zayat's bankruptcy resulted in other problems. Among the people who owed him money, his bankruptcy filings revealed four loans to members of the Jelinsky family. Two members of that family, Michael and Jeffrey Jelinsky, pled guilty in 2009 to illegal bookmaking. As a result, the racing commissions in California and Kentucky opened investigations on Zayat; racing licensees are not to associate with bookmakers or convicted felons. He claimed that he had no knowledge of the Jelinskys' illegal acts. He stated that he thought the brothers were professional gamblers and that they had financial need. Further, he said he loaned them money because he knew their father and that the money they owed him was unrelated to gambling; he stated that some of the money he loaned was to assist one of the brothers with a divorce. He was cleared in both states. Although New York also stated that they were investigating, there were no news reports of any adverse action.

An associate of the Jelinskys who also pled guilty in the illegal betting operation, Howard Rubinsky, filed a lawsuit for breach of contract in federal court against Zayat in March 2014. In the Rubinsky alleged Zayat failed to pay off a $1.65 million line of credit in 2004. Rubinsky's claim was that he extended credit to Zayat with Tradewinds Sportsbook for the purpose of betting on horse races via a gambling website set up in Costa Rica. Zayat's lawyer described the suit as “a meritless claim”, and filed a motion to dismiss, in part on the grounds that the statute of limitations ran after six years.