Grand Prix takeover plan awaiting investors' vote
The organizers of the Baltimore Grand Prix are awaiting a vote from shareholders on a proposed company takeover that would greatly dilute their ownership — but could save the race from bankruptcy.
More than two-thirds of shareholders have voted in favor of the plan in which former Goldman Sachs and Constellation Energy executive Felix J. Dawson would assume leadership of Baltimore Racing Development Inc., the company that ran the Grand Prix, according to sources with knowledge of the deal. But investors must still ratify an operating agreement between the parties, and the company's five managers must approve a contract with Dawson, the sources said.
Under the plan, Dawson's investment firm, Wilkes Lane Capital, would give Baltimore Racing Development $3.3 million and control 58 percent of the company. Baltimore Racing Development is facing more than $12 million in debt, with more than $5 million of that past due. City officials have given the company until Dec. 31 to enter into a payment plan on approximately $1.9 million in unpaid taxes and other city obligations.
Investor Sean Conley of Martha's Vineyard, who owns a 3 percent stake in the company, said he received a form asking him to approve an operating agreement between the parties last week.
Conley, who declined to say how he voted on the proposal, said some investors are concerned about their shares being diluted by nearly threefold.
"It's going to be heavily diluted, but it's still better than zero," Conley said. "If [the race] goes on long enough, they'll recoup their money. … There's no real alternative. No one wants bankruptcy."
Meanwhile, IndyCar on Thursday officially released its 2012 schedule, which includes the Baltimore Grand Prix, slated for Sept. 2.
Sarah Davis, the senior director of business affairs for IndyCar, said the inclusion of Baltimore on the racing schedule reflected optimism that the race would occur, not inside information about a pending restructuring.
"We don't have any specific details" about the Baltimore race organizers, Davis said. "The city and [Baltimore Racing Development] are moving ahead as if this is going to happen."
Davis said IndyCar executives are not involved in talks to restructure the Baltimore team.
"We do not get involved in organizational structure," Davis said. Baltimore Sun