BK Racing uh oh

$428,794.00 ain't bad for an afternoon's work at Daytona. Of course bagging 100K for finishing near the back at Las Vegas isn't hard to take either but expenses eat up purses like that quickly.
 
Charlie Spencer said:
Spend $10 million-plus to earn $3.5 mill. o_O
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It sounds like the owner of BK was going to keep spending until the money spigot got turned off. It is a good thing he has those charters in his back pocket to liquidate. I wonder if Nascar would purchase them back at a higher than appraised value?
 
"It's CRAZEE! Our sponsorship prices are so low, we're lose money at every race! How can we afford to do it???"

<everybody, all together ... 3 ... 2 ... 1 ...>

VOLUME!!!
 
In more than two hours of testimony Thursday in bankruptcy court, Ron Devine passionately defended his operating of BK Racing. He said if a trustee is appointed to take over the team, the employees would quit and the team would lose a sponsorship deal with Earthwater worth $3.6 million in cash, company shares and product. He reiterated his claim that Union Bank & Trust just wants to sell his charter if its selected trustee is appointed to oversee the team. The hearing will continue next Wednesday.

http://www.espn.com/espn/now?nowId=21-0768595421512602858-4
 
^ I know some people who didn’t let that get in their way.

There are still lots of them out there.
 
BK Racing to be operated by trustee after team owner loses financial control
By Bob Pockrass, ESPN.com

CHARLOTTE, N.C. -- BK Racing will be operated by a trustee as team owner Ron Devine lost financial control of the NASCAR Cup Series team in bankruptcy court Wednesday morning.

U.S. District Court Judge J. Craig Whitley appointed Matthew Smith of The Finley Group as the trustee.

"We cannot continue to [have this bankruptcy] operate in an out-of-control manner," Whitley said in announcing his decision. He is expected to sign an official order on Thursday.

BK Racing, whose driver this year has been Gray Gaulding, will continue to field a race team as it goes through the debt reorganization as part of the bankruptcy. While the judge encouraged Devine to work with the trustee, Devine said he was unsure whether he will.

"I'm disappointed, obviously," Devine said after the ruling. "We'll see. ... I don't know if I will stay involved in it or go in another direction."

Creditors have until April 26 to file claims with the court, and the judge encouraged all those who feel they are owed money to file claims with the court. Union Bank & Trust claims it is owed $11.47 million in loans and interest that are now past due, and the Internal Revenue Service claims it is owed $2,893,499 in primarily payroll taxes, interest and penalties. Race Engines Plus hasn't issued an official claim, but its filings indicate it is asking for $2,247,611 in payment of a previous arbitration award and unpaid bills.

According to the court filings, Devine invested $15 million in BK Racing to keep it afloat in its first three years and then lost $11.0 million in 2014, $10.1 million in 2015 and $8.45 million in 2016. Devine said he has put in $500,000 since the end of last season to keep the team afloat and currently pays approximately $15,000 to $25,000 a week out of his own pocket in team bills.

Devine spent more than two hours on the stand Thursday, and the hearing had to be finished Wednesday with him on the stand for another two hours. He said the bank just wants to sell his charter (NASCAR's version of a franchise) to gain money to pay back loans and said his employees might not work for a trustee.

"You're trying to figure out whether to put a trustee? It's a disservice," Devine said in his testimony. "Not only to me and my $35 million that I've invested, but to the people sitting out there trying to get paid.

"All they want to do is capture my charter and move it."

Devine also testified that a trustee would not know how to operate a team or navigate the NASCAR processes on a race weekend.

The judge was not swayed by Devine and could have forced a liquidation Wednesday. Devine has failed to file many of the financial documents required when going through a Chapter 11 bankruptcy despite getting two extensions. He had not paid employees for January, and he said he planned to have potential sponsor Earthwater give them stock in the company, which will go public later this year.

"It's a sad day for BK," Devine said afterward, adding that he would encourage employees to work with the trustee. "It's come a long way.

"Unfortunately, the enemies or the disputes we have had along the way caught up to us."
 
[QUOTE="LewTheShoe, post: 1361694, member: 8807"

"Unfortunately, the enemies or the disputes we have had along the way caught up to us."[/QUOTE]

Always somebody else's fault. I guess wanting to get paid for loans made and services rendered makes you an enemy...... The "millions" dollar question is, does BK Racing have ANY value on the market, charter or otherwise?
 
StandOnIt said:
oh yeah sooo exciting. Foreclosures are the bomb
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Get "The Bomb" out of your vocab as it is like totally 90's dude. I never said foreclosures were exciting or the bomb but I did say it will be interesting to see what charters are worth on the open market. Are they worth 5-10-15-20 million?
 
The value of the charter will reflect the historical performance of it (low in the case of chronic backmarker BK Racing) as well as the supply/demand balance in the next trading period after the season.

In a bankruptcy, there is always someone ready to jizz on the carcass, obviously this one included. But race teams have gone bust before, and will again in the future. Same is true of other businesses as well. It is always ugly at the end, according to a bankruptcy lawyer I know. At least with BK Racing, which was under capitalized, under sponsored, and mismanaged, it was ugly all along... not just at the end.
 
BK Racing to be sold to satisfy creditors

BK Racing will be sold, the court-approved trustee operating the team said after a hearing Tuesday. Discussions are underway.

“We’re selling a race team, we’re not just selling a charter,’’ said Matt Smith, the trustee operating the team while it is in Chapter 11 bankruptcy. “So the charter is the largest asset in this case but it’s not the only asset. This is a viable race team and we’re trying to prove that each and every week. We’re meeting obligations of NASCAR by showing up and competing in good faith.

https://nascar.nbcsports.com/2018/06/12/bk-racing-to-be-sold-to-satisfy-creditors/
 
Surprised NASCAR has let it get this far. Still wouldn't bet against some anonymous caretaker overbidding to keep the franchise value high, and then that person selling the charter behind closed doors in the offseason.
 
any team that either wants to get in cup, or wants to expand to another car that wants a charter are going to bid on the charter. I don't think somebody would buy it and not use it. That doesn't make any sense.
 
So Does the team show up this weekend at the road course? Curious what happens as of right now with it being in process of selling
 
Part of having a charter is probably that you are required to participate, otherwise: fines, most likely.

Now could BK be represented by a completely different organization, say a Californian-based road racer doing a one-off that is officially the BK #23, but otherwise has no connection and he fields his own car? Don't know why not.
 
Charlie Spencer said:
Supporting documentation, please.
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It's reasonable speculation on my part, the agreements aren't out on the open after a quick google search, but what's the point of having charters if you're NASCAR if the teams having the charters are not required to participate? The charter system provides the teams a guarantee. NASCAR had to get a guarantee as well from the system if their lawyers were worth 10 cents.

Formula One has "charters" of a sort, and under multiple Concorde agreements participation was mandatory. Even created instances where teams like Arrows in the past intentionally did not meet 107% qualifying standard in a race so they met their obligations to the series to participate, but did not race.

By the way, Mr. Devine from November 2017:

https://www.frontstretch.com/2017/11/15/digging-into-the-charter-system-has-it-been-good-for-nascar/

“I think that it’s an area that we’re addressing and looking at really, really hard,” said Devine, owner of BK Racing when addressing how these four “open” spots affect charter value. “I think it’s something that takes a lot of thought. It’s the heritage of NASCAR, the openness of it, so it has a lot of positives. I think that a closed system probably is more valuable, but I also think there is a lot more to it than just yes and no. In general, I think it’s an area that a lot of people are looking at and it needs to be addressed.”

Devine owns the Nos. 23 and 83 race teams. Both cars have had a plethora of drivers behind the wheel over its six-year existence. However, the No. 23 has a charter and is among the bottom three in owner points. Though NASCAR can’t do anything about the charter this season, as it’s among the bottom three in points for the first time, the team has the option of selling it.

Looking ahead to 2018, though Devine admitted he’s looking to purchase another charter. The security of having a spot on the grid still means enough to him to buy a medallion.

Heading into the season finale at Homestead-Miami Speedway, the No. 83 car is leading the open teams in points while missing a trio of races at Sonoma, the Brickyard and, most recently, last weekend at Phoenix. Competing in 32 events, the No. 83 group is 36th in the owner standings, 111 markers ahead of the No. 55 team, which is owned by Jay Robinson, the second highest open team.

“I think it’s harder to run a part-time team, to be honest with you,” Devine said. “It’s start-and-stop and that’s one of the reasons why we want to keep it going. It’s very disruptive to shut it down and then fire it back up.”

Of course, there is more money involved when finishing a position up in points, even if it’s down in the mid-30s. Devine wants to be ahead of the Nos. 7 and 55, owned by Robinson, so he can have bragging rights, as well as hope to acquire a second charter for 2018.

When asked about changes to the system, Devine was hesitant to recommend any.

“NASCAR is evolving,” he said. “I think that part of that evolution is to continue doing stuff, whatever makes sense along the way. I think you’re going to see a lot more positive change coming.”
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This statement is on the Wikipedia page for the Race Team Alliance, although it it unsourced: "Failure to field a car results in the losing of that charter."
 
Any rich xfinity owners who would like to come to cup? Maybe the guy who owns the 11 could move up, I think he owns that leafgutter company.
 
jpell15 said:
Any rich xfinity owners who would like to come to cup? Maybe the guy who owns the 11 could move up, I think he owns that leafgutter company.
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They are with Chevrolet and pretty smart guys, I doubt they would want to take over a team with outdated equipment.
 
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