Iowa Speedway dispute
Last summer’s ownership change at Iowa Speedway in Newton has sparked a still-escalating court battle between two Iowa families, with charges in each direction involving unpaid bills and contractual breaches.
Jasper County court papers allege that Manaco Corp. and Manatt’s Inc., corporate arms of the family that built Newton’s racetrack, stiffed the new buyers for more than $1.8 million in unpaid bills when the speedway changed hands last June.
The new owners, a corporation formed by members of the Clement family, say they in turn have been accused of defaulting on the deal because they held back on scheduled payments to the Manatt family because of the unpaid bills. Documents say the Manatts have threatened to file their own lawsuit against Conrad Clement, the founder of Featherlite Corp., a since-sold Cresco company that makes trailers, and three of his relatives if the Manatts aren’t paid in full within 10 days.
The latest version of the lawsuit, a 64-page document filed this week by Des Moines attorney Scott Brennan, alleges that the Clements were stuck with nearly $1.85 million in unpaid bills after the speedway changed hands on June 30, 2011 – despite a provision in the purchase contract that required the Manatts to pay any outstanding debts.
To compensate, the new owners (who financed some of the $19 million purchase with loans from Manaco) paid only $152,588.37 as part of the scheduled payoff of a $2 million loan that was due Dec. 31.
Court documents say the Manatts viewed that as a default on the $2 million loan – one that will spark a second default on a separate $4.3 million loan, the Manatts contend, if both promissory notes aren’t repaid in full by Feb. 20.
The Clements’ lawsuit asks a Jasper County judge to sort out who owes what to whom regarding a host of Iowa Speedway issues, including a lapsed sponsorship deal between the speedway and Manatt’s Inc., the Brooklyn, Ia., construction company owned by the former Speedway owners.
Documents accuse the construction company of unjust enrichment and trademark infringement, among other things, for continuing to use the speedway name in advertising even after a sponsorship deal expired. Court papers say the new owners were never told about the advertising deal and only discovered it in a desk drawer after an administrator left.
Meanwhile, court papers say Manatt’s sent the speedway official notice late last month regarding $658,000 that the construction company claims it’s owed for pre-sale bills that allegedly weren’t covered by the purchase agreement.
Stephen Marso, attorney for the former owners, said in an e-mail to the Register that “Manaco and Manatt’s are disappointed that (the Clements’) USMC and U.S. MotorSport have resorted to filing a lawsuit instead of paying what they agreed to pay. We helped build the Iowa Speedway, and the racing fans around Iowa helped make the Speedway what it is today.” Des Moines Register