Jan 5, 2004
Can CART Emerge from Bankruptcy?By JR Nerad
If you'd like to buy the Champ Car World Series, the crown jewel of the once-proud Championship Auto Racing Teams sanctioning body, you better speak now or forever hold your peace. U.S. District Judge Frank J. Otte has approved CART's proposed sale of assets after the series filed for Chapter 11 bankruptcy protection about three weeks ago. The agreement was the latest in a series of plans to acquire the troubled racing organization by Open Wheel Racing Series LLC, a group composed of three CART team owners.
If you'd like to ace the Open Wheel Racing Series (OWRS) folks out of taking over the Champ Car World Series -- and why you would want to do that is an open question -- you must get your act together quickly. The judge has scheduled January 23 as the deadline for alternative bids for Indianapolis-based CART's assets, and while no other bidder has held his hand up to this point, Tony George and the rival Indy Racing League might make things miserable for OWRS by submitting a bid for the whole series or, if allowed, for contracts with individual race promoters. For example, the IRL might have a strong hankering to take over the Toyota Grand Prix of Long Beach, which has long been regarded as CART's premier race.
Should alternative bids surface, either from the IRL, Formula One, or just some rich guy who wants to plaster his name on a racing series, those bids, along with the one from OWRS, will be taken under consideration by the bankruptcy court during an auction to be held on January 28. In the absence of alternative bids, it is possible Judge Otte could approve the sale to OWRS that day or soon thereafter.
CART and Open Wheel Racing have already agreed to sale terms, and the bankruptcy filing was simply part of the strategy by OWRS's principals Gerald Forsythe, Kevin Kalkhoven and Paul Gentilozzi to take over the series with the lowest possible cash outlay, something each of us would do if we were in their places. It is reported that if no other bids come out of the woodwork, OWRS will spend approximately $1.6 million in cash to take over CART's assets and, at the same time will assume another $1.4 million or so in CART liabilities, most in the form of prize monies owed to teams that participated in the 2003 season.
It could be a long month of waiting for OWRS principals and for teams desiring to participate in the Champ Car World Series in 2004. Sponsorship cash is always hard to lay one's hands on, but it is made still harder by the still iffy nature of the 2004 Camp Car campaign. The previously scheduled season opener that was to have taken place in St. Petersburg, Florida, has already been postponed, and Champ Car drivers and owners are now hoping to get the series started April 18 with the aforementioned Grand Prix of Long Beach.
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