Open Wheel Racing Series
defeats IRL Champ Car series
to continue
by Mark Cipolloni
January 28, 2004
INDIANAPOLIS. – The US
Federal Bankruptcy Court and Judge Otte has ruled that the Open Wheel Racing Series
group has won the battle to purchase the assets of the Champ Car World Series, enabling
it to run the US-based single-seater series as planned in 2004. It was a stunning
defeat for the IRL and Tony George, for the road racing cartel over the oval track
cartel.
In front of an overflow crowd that included IRL founder and Indianapolis Motor Speedway
owner Tony George and OWRS leaders Paul Gentilozzi and Kevin Kalkhoven, Judge Otte told both
sides to go to their rooms and settle on final bids.
"We're going to decide it," Otte said, "and we're going to decide it today."
After a long day of back and forth debate, Otte ruled that OWRS won on all counts “with
no stipulations attached". This was despite a $13.5 million bid by the IRL for five of
CART's street or road circuit dates, including one in Mexico, one in Canada and three
others - including the prestigious Long Beach event.
Midway through the day, the IRL withdrew its bid to purchase CART's supply of engines,
as Cosworth had the right to buy them back at $10 each and if the IRL had bought them,
they would have lost millions of dollars in a matter of minutes.
After the ruling at the Federal Building and Courthouse in Indianapolis, OWRS partner
Kevin Kalkhoven told autosport.com: "Let's get out of court, get cars on the track and
go racing. I was never confident about it [the ruling], because that would be arrogant.
I knew it would be decided by a court of law. We're ready to put the fans in the seats
and the cars on the track."
Fellow partner Paul Gentilozzi said: "I'm happy. You never know what's going to happen,
but we believed all along in our plan for the future, and it's great that the court
agreed with our vision. For us, there was never a conflict."
Asked about the chances of reunifying the US single-seater racing scene, Gentilozzi
replied: "We're going to do our own business and do what's best for open-wheel racing."
The third principal of OWRS, Gerald Forsythe, told SPEED Channel, “I’m just glad all
this is over and we can get back to the business of what we do best, and that’s giving
our many fans the kind of racing they’ve come to expect from the Champ Car World
Series,” he declared.
The only outstanding issues to be resolved is whether Laguna Seca and Road America will
join the OWRS calendar. This will be heard at 9.30am EST on Thursday, unless they can
settle it tonight. The issue of 88 Corp's claim over the cancellation of the 2003 CART
finale at Fontana appears to have been appeased with a $500,000 settlement.
$150,000,000 in claims if CART / OWRS contracts not complied / completed
OWRS made case that unique series cannot be replaced
Worst-case OWRS to return creditors 39.79% IRL 7.69%
CART loan $63,000,000 by parent, Will forgo if OWRS wins case
$500,000 letter of indemnity for the Fontana case if OWRS wins to go toward any
litigation
5 min prior to reconvene IRL makes offer of $13.5 mil 20 min recess to consider
IRL says they will run 5 races Mexico City LBGP Canada and 2 others for 3 years starting
in 05
Ashworth from Gold Coast says that the local economy would lose $56 mil by not having OWRS, Net
profit per race is $3 mil per year AUS. They have 30 year-round employees.
They would lose $12 mil in profit over 5 years
$10.8 mil Queensland sponsorship per year
Max 2 races would lose $70-85 mil lease 5 year for Mont. 10 year for Mex City
2 Year contract with Montreal 3 year with Mex. City. Both say they DO NOT WANT IRL
Canada loss would be $82,870 for one year if no OWRS race
Last objection reversed, Was it Fontana / 88 ?
2 Remaining outstanding Laguna and Elkhart Lake to discuss tonight if no agreement 9:30
AM reconvene court to settle by Judge Otte
IRL did not address all of the creditors
Mattingly (IRL) says OWRS proposal a smoke screen. Judge says "I don't think so"
IRL issues are car count / drivers / owner commitment / CART subsidize teams $55 mil
loss in 2003, TV contracts
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