Apr 1, 2002

CART Sues Heitzler, Heitzler Sues CART

By JR Nerad




Happy Easter from Championship Auto Racing Teams. Apparently the animosity surrounding the embattled CART organization is so bad that even Holy Week cannot stand in the way of the wrangling. A couple of months ago, Joseph Heitzler was president of the organization, but just last week CART filed suit against him, charging him with fraud. Not to be outdone, before the week was over Heitzler countersued, charging CART with breach of contract, negligent representation and fraud. So it goes.

CART, which is about to move its headquarters from Troy, Michigan, to Indianapolis, filed its suit last Tuesday in U.S. District Court in Detroit. The suit alleges Heitzler committed the sanctioning organization to a series of costly contracts without the board of directors' approval. CART now claims the contracts Heitzler authorized plus what it calls the unauthorized hiring of employees cost the organization, which is publicly traded, more than $500,000.

The suit alleges that when Heitzler learned that he might be ticketed for the door, he tried to hold onto the president and CEO post that he held for little more than a year by, according to language in the suit, "interfering in CART's contractual arrangements."

CART ended Heitzler's short reign earlier this year after hiring him in December 2000. Chris Pook, former president and CEO of the Grand Prix Association of Long Beach, Inc., was immediately anointed his successor.

While CART's charges against its former top exec were ugly, Heitzler's counter-charges were even uglier. His suit, filed last Thursday in Los Angeles Superior Court, claims his firing came in response to actions he was taking to eliminate conflicts of interest by several of CART's directors, many of whom are team owners and franchisees of the organization.

To prop up this claim, the suit asserts that several CART directors sold off substantial parts of their holdings in the organization immediately before it adopted a controversial engine formula change that many predicted might be disastrous for the series. In a move that some saw as capitulation to the rival Indy Racing League, CART adopted the IRL's naturally aspirated engine specs for its 2003 racing season, dropping its turbo specs after this year.

Heitzler's suit also notes that several members of the board, allegedly angered by his attempts to end the conflicts of interest, attempted to have him terminated for cause at a December 4, 2001, board meeting, only to be rebuffed. Stripped of many of his powers in that meeting, Heitzler was fired in early 2002. He is seeking $2 million in damages, interest and his attorneys' fees.


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