What Happens Next?

[ChaimWitz]

When Sadam Hussein was being pulled out of his hole, he said "I am Sadam Hussein, President of Iraq and I want to negotiate..." With every day that passes, Kevin Kalkhoven sounds more and more like Sadam Hussein and Steve Johnson like Baghdad Bob: they are either absolutely clueless about their circumstances or they both have enormous amounts of chutzpah. I think it is the latter.

This RM item below on SpeedTV belongs in this very long thread. The question now really is: what happens next?

Champ Car Heading for Bankruptcy?
Written by: Robin Miller
02/12/2008 - 07:18 AM
Indianapolis, Ind.

George remains "optimistic" a deal can be struck for 2008.

Tony George was still optimistic about a plan to unify open wheel racing for 2008 following his trip to Japan to try and reschedule the race at Motegi to accommodate Long Beach.

But, by the time George returns to Indianapolis, there might only be one series standing anyway.

The word on the street late Monday was that Champ Car plans to file bankruptcy within the next 24-48 hours which, effectively, will end the 12-year war in open wheel.

Steve Johnson, president of Champ Car, was asked about the bankruptcy rumor on Monday evening and responded in an email: “I have not been informed and we have been hearing the bankruptcy rumor for 18 months.”

However, at least one definitive sign pointed to the end of a series that began as CART in 1979 and was re-titled Champ Car after Kevin Kalkhoven and Gerry Forsythe took it over in bankruptcy court in 2004.

Pat Caporali, hired a few weeks ago as CC’s new director of public relations, reported for her first day of work on Monday. But she was informed it might be a good idea to try and get her old position back with Chip Ganassi because there would be no work for her.

Other employees were reportedly told to cease working on 2008 projects and some began cleaning out their desks.

It’s not known whether a bankruptcy proceeding was part of the plan to have the Indy Racing League assume control of open wheel. George has proposed free cars, engines and $1.2 million to any and all CC teams able to fund themselves for a full season.

He also agreed to add Long Beach, Edmonton and Australia to the ‘08 schedule and possibly one more venue so it might be necessary for Champ Car to bankrupt in order for those tracks to strike new deals with George.

Kalkhoven and Forsythe promote the race at Long Beach, in addition to Toronto and Portland while Mike Lanigan, who co-owns cars with Paul Newman and Carl Haas, is the promoter at Houston and Cleveland. Forsythe also co-owns Mexico City.

But the repercussions could come from Laguna Seca, Elkhart Lake, St. Jovite, Canada, Belgium, Spain and The Netherlands. None of those tracks would have races in ‘08 in a unified series.

Besides those tracks and people employed at Champ Car, others figured to lose out in a bankruptcy would be outside contractors. Carl Haas has some $2 million worth of parts for the Panoz chassis, which will be made obsolete because the IRL uses Dallaras.

One contractor, Dan D. Jones & Associates, has already filed a law suit against Champ Car for non payment. After the new Panoz cars developed massive fuel leaks and re-fueling problems during the first three races of 2007, Jones was hired to overhaul and save the fuel systems—which he did.

But, according to the suit filed in Indianapolis superior court last week, Jones has never been paid one penny of the $300,000 he’s owed. He’s hired Jim Voyles to try and recoup the money.

As for George’s trip to the Far East, he and Honda’s Robert Clarke met with Motegi management to try and figure out an alternative date or some kind of plan to allow Long Beach to run April 18-20 (also Motegi’s date).

Kalkhoven has been adamant there will be no deal without Long Beach on its original date.

“I am optimistic but there are plenty of complications that could knock it off-line,” said George via email from Japan. “There are plenty of things to consider, Motegi and Long Beach are just part of it.

“Everyone expresses a desire to push to make it happen and that’s where the effort is being applied at the moment.”

[Chaparral66]

Any news outlet in Indianapolis get any soundbites with Tony George when he got back from Japan?

[indycool]

Nope.....haven't heard any.

[ChaimWitz]

The item below from AR1 suggests to me that all reason has been lost is the panic and delusion filled place called ChampCar. Anything that OWRS is involved with has the potential to become used food and this flat stinks of it. The Amigos are the ones seeking relief via TG and other means from this Chernobyl of a business that they created. The promoters and most teams and ChampCar employees all know that they did not have "a reasonable chance of expecting employment in 2008" based upon the realities of 2007. Everyone else with common sense knows this too. It is also pretty dammed clear to me that the Amigos were all watching out for Number One, not their promoters, teams or employees. This has not been a business since the OWRS has owned it. It has been a money losing, tax write off ego hobby and any discovery would prove it. Nice try MarkC.

IRL and Honda may get pulled into Champ Car lawsuits Should Champ Car file for bankruptcy to facilitate a merger as the rumors suggest, one can expect the lawsuits to fly. But it's not just the promoters who could sue, but also CCWS teams (and their employees) who have to shutter because their CCWS subsidy ends. Team employees will be put out of work, when they had a reasonable expectation of employment for 2008.
In addition to CCWS being a defendant, the IRL and Honda could also both be defendants.

Some attorney would love to start a class action lawsuit on those affected (promoters, teams, employees), not to forget the small group of fans who bought airline tickets, booked rooms, requested and had approved vacation time for races cancelled and/or moved.

The plaintiffs' argument would be that if Tony George and Robert Clarke had not been involved with trying to create a unified series at such a late, late date for 2008 season, then CCWS would not have filed for bankruptcy prior to the 2008 season.

Effectively, it could be argued that Tony George and Robert Clarke (on behalf of the IRL and Honda) committed tortuous interference for the expressed benefit of their employers.

How concrete or tenuous the plaintiffs' argument would be argued in the court.

Stated differently, if Tony George had shutdown any discussions after Robin Miller's mid-January article, it is problematic whether CCWS would file bankruptcy.

[ChaimWitz]

Interestingly, the item from the rumors section of AR1 quoted in my post above was pulled shortly after I noticed it. Curious.

[indycool]

That doesn't hold any water. All of CC's deals for '08 are its own. If CC goes bankrupt, then CC answers for it. If CC has deals with people and can't run, CC answers for it. There isn't any tortious interference involved. The IRL and Honda aren't causing CC to go bankrupt. CC may cause CC to go bankrupt.

[garyshell]

That doesn't hold any water. All of CC's deals for '08 are its own. If CC goes bankrupt, then CC answers for it. If CC has deals with people and can't run, CC answers for it. There isn't any tortious interference involved. The IRL and Honda aren't causing CC to go bankrupt. CC may cause CC to go bankrupt.

Tell that to the lawyers wringing there hands with glee over the prospect of making some $$$$ over this matter. They will attempt to make a case for this with "...king George's" offer to the OWRS teams, no matter how carefully crafted or delivered that offer was. I am not saying they have a leg to stand on, because that has NEVER stopped a lawyer who smelled blood in the water.

Gary

[indycool]

That may well be true, as long as they can make some $$$$. But a lot of those any more are on contingency.............the GOOD lawyers get some bread up front.

[ChaimWitz]

Today is The Silence of the Scams. My sense is that the end is indeed near. Could what happens next finally be about to happen?

[heelntoe]

Today is The Silence of the Scams. My sense is that the end is indeed near. Could what happens next finally be about to happen?

Funny...I have to say that the delayed effect of two wealthy guys realizing that they've lost a few hundred million since the last BK and likely have only a few options to gain some of the losses back...has set in! For KK, the notion of selling CCWS to TG for a profit is long gone...For GF, the idea of gaining back some of his losses from MPH...also long gone. The notion of putting more good money after bad has caused a rift larger than the Grand Canyon. KK's done...and for those of you that think he's got the same money as GF, he doesn't...not even close. The next few weeks will be very weird...no matter what fence you sit on.