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  • CC files bankruptcy

    gass posted this on the IC board:

    Champ Car yesterday filed Chapter 11 bankruptcy, igniting what could potentially be a bidding war for its assets. The Indy Racing League last month agreed to acquire certain assets of Champ Car, but the bankruptcy court could open things up. “To the extent that another buyer would come in and pay more, that would be better for the creditors,” said Jeffrey A. Hokanson, an attorney with the Indianapolis-based law firm Hostetler & Kowalik, which represents Champ Car. If another bidder offered a higher amount, Hokanson said IRL officials could counter offer. “It can amount to an auction,” he added.

    But motorsports experts don’t expect another suitor to swoop in this time. “A judge certainly has the right to hand it over to another buyer if one shows up, but I don’t anticipate that,” said Tim Frost, a Chicago-based motorsports business consultant. “This is part of the procedural motions Champ Car had to go through to make the transaction with the Indy Racing League happen. I believe this is the final chapter of open-wheel unification.”

    A likely scenario, Hokanson said, is for the bankruptcy to be used as a tool to complete the IRL-Champ Car unification, and to sell the remaining assets such as engines, chassis and office furniture and supplies to satisfy creditors.

    The filing, submitted in U.S. Bankruptcy Court in Indianapolis, showed that the Indy Racing League essentially paid $10 million for all of Champ Car’s intellectual property rights, a mobile medical unit and a non-compete agreement and consulting fee for Champ Car co-owners Gerald Forsythe and Kevin Kalkhoven. The filing, however, states that Forsythe and Kalkhoven would use $4 million to promote the Long Beach Grand Prix in April.

    The filing indicates Champ Car has between $10 million and $50 million in assets and owes between one and 49 creditors between $1 million and $10 million. Most of the assets likely have a very limited number of potential buyers, which could bring the value down. The creditor with the largest claim is Cosworth Inc., a California engine maker owned by Kalkhoven and Forsythe, which is owed $1.83 million. Several of Champ Car’s former teams are owed money, including PKV Racing, which is owed $645,883; RuSport Inc., which is owed $424,861 and Forsythe Championships Racing, which is owed $327,961.

    Today, Champ Car lawyers moved in court to keep paycheck flowing to 20 Champ Car employees, who are responsible for preparing for the race in Long Beach.

    Will open-wheel unification truly happen this time?
    link

  • #2
    Let the stiffing begin. :kk
    Unless of course you are GF and KK who will make a few bucks owing themselves money.

    Comment


    • #3
      And there it is:

      the Indy Racing League essentially paid $10 million for all of Champ Car’s intellectual property rights, a mobile medical unit and a non-compete agreement and consulting fee for Champ Car co-owners Gerald Forsythe and Kevin Kalkhoven. The filing, however, states that Forsythe and Kalkhoven would use $4 million to promote the Long Beach Grand Prix in April.

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      • #4
        I wonder how much the consulting fees is? And why didn't DP and PG receive anything? Or are their shares of CCWS ownership so small they got no voice in the merger deal and no payout from it?

        So the $4million will go to promotion, filling the field, paying themselves a sanction fee et al?

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        • #5
          You know what, at this point, we are unified. Frankly, if it helps KK and GF to be promoters at future IndyCar events, then so be it. That way TG is not paying for track rentals...though in a roundabout way, he is with the settlement. :tg :kk
          RIP Dan Wheldon :(

          "Anybody who says the IndyCar Series is not the best championship in the world is a complete idiot in my book." ~Dan Wheldon


          "It's a discussion board, not a society ball." ~Skypigeon

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          • #6
            Lawyers: why chapter 11 and not 7?

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            • #7
              Originally posted by Scott Bennett
              Lawyers: why chapter 11 and not 7?
              Could it have something to do with the Atlantics series? And, possibly, the ACCUS membership (i.e., the ability to run races without an outside sanctioning body).

              Just my WAG...

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              • #8
                I guess we will get a printout on the liabilities once everyone submits, it appears they are in good enough shape that the creditors will get most of their money. hope the guy that fixed the fueling issues comes out OK.
                It's always been about the Indy 500!
                I realize I have the right to remain silent, but don't have the ability or enough common sense to do so.:rolleyes:

                Comment


                • #9
                  Lawyers: why chapter 11 and not 7?
                  The recent massive change in bankruptcy laws made 11's more attractive than 7s and 13s very tough for corporations. Bankruptcy for a corporation was made two times easier; bankruptcy for an individual was made four times harder.

                  In other words, they had the flexibility to do so in order to protect the big wigs in this case.

                  QUESTION: I was told for five years that Champ Car was in stable financial condition. So, why file for bankruptcy? (Just kidding )

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                  • #10
                    ^They are stable. There is a nice continuous flow of money of KK's and GF's pockets.
                    I wish I knew - Dennis "Cutty" Wise

                    When its game time, it's pain time! - Terrible Terry Tate

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                    • #11

                      ^They are stable. There is a nice continuous flow of money of KK's and GF's pockets.
                      I don't mean to be a jerk, but I was told with the certitude of a saint that Champ Car was financially stable by a lot of people here and definitely among the people who had me banned from CCF and ***.

                      Whenever I would project this reality, they would spit upon my very words as if I were saying them out of pure partisanship. The reality is that debt kills. They especially didn't like it when I said ICS lived on cash and CCWS on credit.

                      I could never see the reason for them to exist after Indy Car went to roads and streets. It was pure ego from that point forward - the very point I call the beginning of the CC end: they had no formal, legitimate reason to exist.

                      Comment


                      • #12
                        The memorandum includes a non-compete covenant for Forsythe and Kalkhoven, who are each slated to receive an additional $2 million, provided they pay certain expenses associated with the promotion and operation of this year's Long Beach race; and show commitment and support of the IRL.
                        So Jim I posted this in the other forums thread, but I found it interesting, do you think Gerry showing commitment and support of the IRL, by not runing a team and holding PT to his contract?

                        http://sports.espn.go.com/rpm/news/s...d=5&id=3280271
                        Tara was the name of our cat.

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                        • #13
                          I don't mean to be a jerk, but I was told with the certitude of a saint that Champ Car was financially stable by a lot of people here and definitely among the people who had me banned from CCF and ***.
                          Hey MarkDonohueFan some here are still claiming the "merger" happened because the IRL only had 15-16 cars. Notice they decided to file a week before the agreement actually happened.
                          Tara was the name of our cat.

                          Comment


                          • #14
                            Originally posted by don7031
                            ^They are stable.
                            as stable as Generalissimo Francisco Franco's medical condition...

                            Comment


                            • #15
                              Originally posted by Mack Too
                              I guess we will get a printout on the liabilities once everyone submits, it appears they are in good enough shape that the creditors will get most of their money. hope the guy that fixed the fueling issues comes out OK.
                              ***
                              Originally posted by MarkDonohueFan
                              I don't mean to be a jerk, but I was told with the certitude of a saint that Champ Car was financially stable by a lot of people here and definitely among the people who had me banned from CCF and ***.

                              Whenever I would project this reality, they would spit upon my very words as if I were saying them out of pure partisanship. The reality is that debt kills. They especially didn't like it when I said ICS lived on cash and CCWS on credit.

                              I could never see the reason for them to exist after Indy Car went to roads and streets. It was pure ego from that point forward - the very point I call the beginning of the CC end: they had no formal, legitimate reason to exist.
                              They WERE solvent, so all the creditors should get paid, in full, and CCWS wasn't operating solely "On Credit"

                              The filing indicates Champ Car has between $10 million and $50 million in assets and owes between one and 49 creditors between $1 million and $10 million.

                              Comment

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