Originally created 01/24/04

IRL, investor group only bidders for bankrupt CART

INDIANAPOLIS -- The Indy Racing League and a group led by three race team owners in the rival CART open-wheel series are the only bidders for assets of bankrupt Championship Auto Racing Teams.

There had been speculation earlier in the week that other racing series might enter the bidding competition, but Jim Carr, CART's bankruptcy attorney, said no other offers emerged before the submission deadline Friday.

A hearing before U.S. District Judge Frank J. Otte will be held Wednesday to determine how CART's assets will be disposed.

CART, which filed for Chapter 11 bankruptcy protection last month, has agreed to sell all its assets to Open Wheel Racing Series LLC for $1.6 million in cash. Because the proposed sale also calls for Open Wheel to assume some liabilities, including 2003 prize money owed to teams, the total purchase price would be about $3 million.

The IRL waited until Thursday to make what IRL spokesman Fred Nation described as a "substantial" offer on some of CART's assets.

Nation did not say how much the IRL offered but said it was more than $150,000 above what OWRS had bid. He said the IRL was only seeking some of CART's assets, which include contracts with race courses and equipment.

"We're not buying the whole thing," Nation said. "We're offering more money for less than the other folks. If we do nothing else, we've provided CART some more money on its debts."

Open Wheel Racing Series' principal owners - Paul Gentilozzi, Kevin Kalkhoven and Gerald Forsythe, all CART team owners last season - could increase their bid during Wednesday's auction, and it appeared that they were prepared to do so.

In a statement released Friday afternoon, the Open Wheel Racing Series partners promised to do whatever it took to save the series.

"It's clear what the IRL's intentions are when you look at which assets they intend to purchase," Gentilozzi said. "They want to kill the series, yet they hide that fact under the pretext of 'unification.' They're not fooling anyone."

Nation said the IRL had been asked previously to consider buying CART to bring together America's two open-wheel racing circuits. The first time, however, Nation said the $100 million price tag was too much.

Nation said the IRL was later asked to buy CART for $7 million but decided against it because of CART's pending legal matters.

After CART filed for bankruptcy, Nation said the IRL reconsidered.

"We decided that we might get assets that we can use at a very good price," Nation said.

CART became a publicly traded company in 1998, when its shares sold for as much as $33. It has been on a downward spiral in recent years following the creation of the rival IRL in 1996.

The IRL was created as an all-oval American series, but now has a race in Japan and plans to include road races on its 2005 schedule. CART stages about 50 percent of its races on road courses such as the city street circuit in Long Beach, Calif., one of the venues Gentilozzi said the IRL was seeking in the Chapter 11 case.

Gentilozzi has said his group has letters of intent from teams representing at least 18 cars, a television package and a schedule of at least 15 races this season, starting with the Toyota Grand Prix of Long Beach on April 18.

Kalkhoven said in the statement that the IRL's bid excludes teams, their employees and other races.

"We intend to preserve the teams and sponsors," Kalkhoven said. "No amount of posturing by the IRL will determine the ultimate fate of the Champ Car series."

In October, Indianapolis-based CART announced it lost nearly $78 million in the year's first nine months, and said it would have to halt operations if the takeover by Open Wheel was not completed.

On the Net:

CART: www.cart.com


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