ISC sues CART

[Jim Wilke]

Well, how about this:

DAYTONA BEACH, FLORIDA – November 4, 2003 – International Speedway Corporation (“ISC”) (Nasdaq/NM: ISCA; OTC Bulletin Board: ISCB) today announced 88 Corp., a wholly owned subsidiary of ISC and parent of The California Speedway Corporation, owner of California Speedway (“Speedway”), filed a Complaint for Declaratory Relief with the U.S. District Court, Central District of California against CART, Inc. The Complaint seeks a declaration that wildfires throughout San Bernardino County, California, and surrounding areas beginning October 21, 2003, constituted a “force majeure” as described in the Official Organizer/Promoter Agreement (“Agreement”), which led to the cancellation of The King Taco 500 event scheduled to occur on November 2, 2003, at California Speedway. Per the terms specified in the Agreement, ISC is due back the $2.5 million Organization and Rights fee previously paid to CART, less a mutually agreeable amount for legitimate expenses reasonably incurred by CART in preparing for the event.

On October 24th, Speedway officials began coordinating with local authorities and agencies regarding the nearby wildfires, including the advisability of proceeding with the race events scheduled for the weekend of November 1st and 2nd, and how the Speedway could assist in emergency and relief efforts. Speedway officials held multiple discussions with CART regarding postponing its race but CART insisted on delaying a decision until closer to the event. Speedway officials disagreed with CART’s position, as to continue delaying a decision would have put a tremendous burden on fans and competitors, as well as fire safety, medical and security personnel.

On October 28th, at the request of several government officials including James L. Brulte, the Senate Republican Leader of the California State Senate, and the desire to not burden safety and rescue personnel nor endanger employees, guests, volunteers or participants, Speedway officials announced the postponement of the coming weekend’s events. CART announced the cancellation of the event on October 29th. Ultimately, the Speedway became host of a “Race for Relief” effort, transforming itself into a drop off site for items to aid those affected by, or fighting, the wildfires.

The Company hopes the dispute with CART will be resolved quickly.

Look under press releases at:
ISC corporate

[Mackie]

Nah, they wouldn't do that, any minute now CART will be on ISC's doorstep, refund in hand, many here have said so.

[dog-ring]

ohoh

[trow]

CART's gettin sued? Again?

LMAO!

They NEVER learn!!!!!!!

[akimbo]

Seems ISC asked the courts to declare the wildfires as a force majeur. They didn't file a suit against CART -- yet.

So if the court says no, it wasn't, then I guess that means that CART gets to keep the 2.5 Mil since aparently ISC, not CART cancelled the race.

Still looks like ISC blinked on this one and are still trying to figure out how to get the 2.5 mill they threw away back.

Should be interesting.

[rrrr]

Originally posted by akimbo
Seems ISC asked the courts to declare the wildfires as a force majeur. They didn't file a suit against CART -- yet.

So if the court says no, it wasn't, then I guess that means that CART gets to keep the 2.5 Mil since aparently ISC, not CART cancelled the race.

Still looks like ISC blinked on this one and are still trying to figure out how to get the 2.5 mill they threw away back.

Should be interesting.

Another crazy statement. I'd like to know where people like you live. Wildfires in an urban area are serious sh*t, not unlike earthquakes or tornados.

I guess that you figure it's all part of the conspiracy to put CART out of business........

[ensign14]

What does the contract for the race say about what happens in the event of force majeure? Alternative dates/transfer of race &c? That could be quite important.

And it is likely that someone got insurance for this. Often an insurance company will not pay out without a Court decision.

Lots more to come about this.

[Jim Wilke]

What does the contract for the race say about what happens in the event of force majeure? Alternative dates/transfer of race &c?

I'm fairly sure that the folks at ISC found their copy of the contract and read it before they called CART and asked to postpone the race.

[SamC]

The following is a complete list of all of the major lawsuits that ISC has lost:

(end of list)

This is a no-brainer. CART is in the position fo arguing that a major disaster is not a reason to not hold a car race. A stupid arqument.

Look for this: ISC will move for "pre-judgement attachment". You get that when your lawsuit is a slam dunk and the guy you are suing is burning up his assets. The court takes the money and holds it until the thing is tried.

[CARTer]

Originally posted by akimbo
Seems ISC asked the courts to declare the wildfires as a force majeur. They didn't file a suit against CART -- yet.

Well, they have, sort of.

This is getting into some arcane questions of legal procedure (that would require many hours of expensive legal research), but it may be the case that CART is requried to assert any claim it has against ISC as a "compulsory counter claim" to be decided in the same action.

If so, this means that if CART decides to file a breach of contract action somewhere else (say, in Indiana), then there's a strong chance the case gets shipped off to southern California and combined with the DJ action already underway.

However, it would not surprise me at all to find out that the agreement also contains a "forum selection clause" wherein CART and ISC agreed, in advance, which court they would use to resolve any dispute. Those clauses are usually enforced by the courts, so if they agreed to litigate somewhere besides southern California (most likely Indiana or Michigal), then the case could be shipped there.

Also, I've seen the "form" promoter agreement that CART has used in the past. That agreement requires the parties to arbitrate any dipsutes over a refund due to force majeur. However, it does not say they will arbitrate the question of whether a force majeur has occured in the first place.

I don't know whether this is the same agreement that they used for the California race. If it is, though, it presents a potentially interesting legal issue as to who decides that a force majeur has occurred - the parties, the court or the arbitrators.

In any event, ISC was very smart to file this in southern California. If it stays there, and eventually goes to a jury, CART has a tough task convincing them that the race should have gone forward in the face of the wildfires.

[Defender]

c^rt in court again? Who'd have thought that!?

The sport can't purge itself of that albatross fast enough. It's time for them to go so the sport can heal. What they are doing now is downright embarrassing.

[indycool]

CARTer, that's interesting. I would imagine, with CART's cash burn and the proposed buyout, that ISC would ask the court next to escrow $2.5 million until a settlement can be reached. Road America escrowed the disputed amount, or was required to, last January in its money flap with CART. Will probably happen here, too, in some form.

[ensign14]

Originally posted by Defender
c^rt in court again? Who'd have thought that!?

The sport can't purge itself of that albatross fast enough. It's time for them to go so the sport can heal. What they are doing now is downright embarrassing.

So you know the intimate details of the contract. You know all the definitions. You know exactly what happened with the postponement/cancellation of the race. You know the parties' obligations to each other in the event of problems. You know that force majeure applies not just to 1 location but all locations.

Because you know all this you are of the legal opinion that CART should pay up.

Or you do not have all the facts at your fingertips and believe that CART is automatically in the wrong.

It may be that CART is in the wrong. It may be that ISC is in the wrong. CART is not going to pay up $3m or whatever just because someone else says so, unless it is cut and dried. It may be cut and dried and ISC has jumped the gun. It may be that the right to bring/defend a claim lies with insurers rather than ISC or CART. But how can we tell without more facts?

[Defender]

No, my primary issue is that the general stench they leave wherever they go has hurt the sport dramatically. It would be in everyones' best interest if that ethically bankrupt organization simply ceased to exist.

[indycool]

Defender, I agree with the "stench." There just didn't need to be the ugliness that CART initially showed toward a postponement with 700,000 acres and 3,000 homes burning in the immediate area and 20 dead. CART -- and, indeed, some of its supporters on the boards -- did not show any semblance of common caring and decency initially, putting its race ahead of all of that and posturing and prancing and sputtering about ISC's politics. When CART realized how badly it screwed up as viewed by the general human race, it tried to recover and participated in the relief effort. But the callousness to start with will be remembered. Very, very big black mark on our sport's image in the public eye.