cart7
12-03-03, 04:25 PM
from the LB press telegram:
CART: Seriesmay go bankrupt
By A.J. Perez
The sale of Championship Auto Racing Teams the organization that has raced at the Toyota Grand Prix of Long Beach since 1984 fell apart Tuesday, moving the series toward bankruptcy.
But CART may still be back as part of the downtown race following a major overhaul.
Open Wheel Racing Series the name of a group of investors was unwilling to make further concessions on a proposed purchase of the series for 56 cents per share ($8.2 million). As a result, cash-strapped CART will likely cease operations, according to a statement released late Tuesday night by the series after a board meeting in Indianapolis.
"We are basically moving toward purchasing the assets (after CART goes bankrupt),' said Kevin Kalkhoven, one of the three CART team owners that make up OWRS, in a phone interview. "We believe that there are advantages in the long run for (CART's) teams and sponsors. It will also remove the uncertainty of a (stockholder) vote, and I believe it will allow us to move more quickly.'
OWRS has made a preliminary offer to purchase CART's assets if it files for Chapter 11 bankruptcy protection. OWRS would "purchase certain assets of CART and assume certain liabilities,' the statement said.
Kalkhoven said he's in negotiations with CART and the two have yet to settle on how much that new deal would cost OWRS, although it's expected to be less expensive.
Any sale in bankruptcy would likely have to be approved in bankruptcy court.
A stockholder vote to approve the original sale terms was scheduled for Dec. 19. That vote now appears to be meaningless since the series could cease operations by that point.
CART has already defaulted on some of its obligations, although it has made payroll.
Kalkhoven said that CART would then run in 2004, although he said it was too early to determine how many teams would be part of the reformulated series.
"We do plan to meet our car- count obligations,' Kalkhoven said.
CART's Long Beach contract calls for a minimum of 18 cars.
CART's schedule is also in flux, but there is one race that Kalkhoven expects to be at the Long Beach Grand Prix scheduled for April 18.
"We certainly plan on being there,' he said. "We are anticipating and hoping we start the season in Long Beach.'
CART said in the statement that there is no guarantee that a deal could be struck with OWRS, meaning the Grand Prix Association of Long Beach would be seeking a replacement for its main event.
In Sunday's edition of the Press-Telegram, it was reported that the Indy Racing League CART's rival in U.S. open-wheel racing and the American Le Mans Series were candidates to replace CART if it goes under.
"We are currently assessing what these developments mean to the Toyota Grand Prix of Long Beach,' said Jim Michaelian, the president and CEO of the Grand Prix Association. "I can assure you that there will be a 30th anniversary of the Toyota Grand Prix of Long Beach that will take place April 16th through the 18th.'
The likely impending bankruptcy of CART would effectively end the run of President and CEO Chris Pook, the founder of the Long Beach Grand Prix who was hired two years ago to try to save the series.
Pook, called the "Father of American Street Racing,' fought an uphill battle from Day 1 thanks to years of mismanagement by the executives before him. The series was already losing millions as well as sponsors and teams as he took over as president and CEO in December 2001.
That trend continued and the inability to keep a minimum number of cars next year was the No. 1 reason the deal with OWRS fell through.
Tuesday's news comes one day after CART announced the postponement of the Grand Prix of St. Petersburg, a race promoted by the Grand Prix Association of Long Beach.
The Grand Prix Association also runs a race in Denver, which is scheduled for Aug. 15.
Long Beach Press Telegram (http://www.presstelegram.com/Stories/0,1413,204~29553~1805533,00.html)
CART: Seriesmay go bankrupt
By A.J. Perez
The sale of Championship Auto Racing Teams the organization that has raced at the Toyota Grand Prix of Long Beach since 1984 fell apart Tuesday, moving the series toward bankruptcy.
But CART may still be back as part of the downtown race following a major overhaul.
Open Wheel Racing Series the name of a group of investors was unwilling to make further concessions on a proposed purchase of the series for 56 cents per share ($8.2 million). As a result, cash-strapped CART will likely cease operations, according to a statement released late Tuesday night by the series after a board meeting in Indianapolis.
"We are basically moving toward purchasing the assets (after CART goes bankrupt),' said Kevin Kalkhoven, one of the three CART team owners that make up OWRS, in a phone interview. "We believe that there are advantages in the long run for (CART's) teams and sponsors. It will also remove the uncertainty of a (stockholder) vote, and I believe it will allow us to move more quickly.'
OWRS has made a preliminary offer to purchase CART's assets if it files for Chapter 11 bankruptcy protection. OWRS would "purchase certain assets of CART and assume certain liabilities,' the statement said.
Kalkhoven said he's in negotiations with CART and the two have yet to settle on how much that new deal would cost OWRS, although it's expected to be less expensive.
Any sale in bankruptcy would likely have to be approved in bankruptcy court.
A stockholder vote to approve the original sale terms was scheduled for Dec. 19. That vote now appears to be meaningless since the series could cease operations by that point.
CART has already defaulted on some of its obligations, although it has made payroll.
Kalkhoven said that CART would then run in 2004, although he said it was too early to determine how many teams would be part of the reformulated series.
"We do plan to meet our car- count obligations,' Kalkhoven said.
CART's Long Beach contract calls for a minimum of 18 cars.
CART's schedule is also in flux, but there is one race that Kalkhoven expects to be at the Long Beach Grand Prix scheduled for April 18.
"We certainly plan on being there,' he said. "We are anticipating and hoping we start the season in Long Beach.'
CART said in the statement that there is no guarantee that a deal could be struck with OWRS, meaning the Grand Prix Association of Long Beach would be seeking a replacement for its main event.
In Sunday's edition of the Press-Telegram, it was reported that the Indy Racing League CART's rival in U.S. open-wheel racing and the American Le Mans Series were candidates to replace CART if it goes under.
"We are currently assessing what these developments mean to the Toyota Grand Prix of Long Beach,' said Jim Michaelian, the president and CEO of the Grand Prix Association. "I can assure you that there will be a 30th anniversary of the Toyota Grand Prix of Long Beach that will take place April 16th through the 18th.'
The likely impending bankruptcy of CART would effectively end the run of President and CEO Chris Pook, the founder of the Long Beach Grand Prix who was hired two years ago to try to save the series.
Pook, called the "Father of American Street Racing,' fought an uphill battle from Day 1 thanks to years of mismanagement by the executives before him. The series was already losing millions as well as sponsors and teams as he took over as president and CEO in December 2001.
That trend continued and the inability to keep a minimum number of cars next year was the No. 1 reason the deal with OWRS fell through.
Tuesday's news comes one day after CART announced the postponement of the Grand Prix of St. Petersburg, a race promoted by the Grand Prix Association of Long Beach.
The Grand Prix Association also runs a race in Denver, which is scheduled for Aug. 15.
Long Beach Press Telegram (http://www.presstelegram.com/Stories/0,1413,204~29553~1805533,00.html)