A federal court in New Jersey on Thursday approved the reorganization plan for Zayat Stables, which will allow one of the leading Thoroughbred owners to emerge from bankruptcy.
All of Zayat's creditors, including Fifth Third Bank and Keeneland, voted in favor of the plan.
"I feel as though we've reached the light at the end of the tunnel," Ahmed Zayat said in a statement. "While Chapter 11 was a necessary step to take, Zayat Stables has emerged stronger, and we are excited about building on our many recent successes in the racing industry. I look forward to carrying out our reorganization plan and continuing to develop some of the best horses in the country."
According to Equibase, Zayat is currently the fourth-leading owner in the country, with $2.24 million in earnings this year on the racetrack.
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Fifth Third attorney Craig Robertson said the bank would have no comment.
Zayat Stables entered bankruptcy in February to block a move by Fifth Third to take over his stable of more than 200 horses. In December, Fifth Third sued Zayat in U.S. District Court in Lexington, alleging he had defaulted on $34 million in loans. Zayat countersued, alleging fraudulent banking practices.
Last month, Zayat and Fifth Third reached a global settlement to pay off the loans by 2015 and dismiss their suits against each other.
"Accomplishing a successful reorganization with unanimous creditor approval in less than seven months is remarkable in a case this size," said Joseph Vann, Zayat's attorney in New York. "It is truly a vote of confidence by industry insiders in the leadership role of Zayat Stables and its chairman, Ahmed Zayat."