Hillman suing Circle Sport over charter

A Sprint Cup team owner's lawsuit seeks the charter NASCAR granted his former partner. Hillman Racing, team owner Mike Hillman and partners Doug Fuller and Matt Miller filed suit Friday in North Carolina Superior Court in Iredell County against former partner Joe Falk, Circle Sport, Leavine Family Racing and Circle Sport-Leavine Family Racing.

Hillman Racing and its partners seek a judgment in excess of $25,000, punitive damages, rights to ownership of the #33 team, its charter and all the profits and benefits that Circle Sport-Leavine Family Racing's #95 car enjoys. Falk aligned with Leavine Family Racing before this season to form Circle Sport-Leavine Family Racing. As part of the merger, the No. 95 was maintained but inherited the #33 team's points and performance, making it eligible for one of the 36 Sprint Cup charters NASCAR granted before the season.

Hillman Racing's #40 was not granted a charter because it had not competed full-time the past three seasons. The complaint by Hillman Racing states that Falk improperly entered into an agreement with Leavine Family Racing.

Court documents state that for the 2015 season, the partnership [between Hillman and Falk] agreed to divert more resources to the #40 car, making it the flagship car. The partners agreed to allow Richard Childress Racing to operate the #33 car for multiple races in return for a payment of $25,000 for all races except the Daytona 500 (in addition to other details regarding the payment of purse and plan money, etc.). RCR would pay $75,000 for the Daytona 500. The complaint alleges that before the Daytona 500 Hillman "discovered that Falk directed a sponsor for the 40 car to write the sponsorship check (for funds due from the 2014 season) payable to Circle Sport and not Hillman Racing. Of course, the parties had all previously agreed and understood that sponsorship funds were to be utilized to fund racing operations, for which Hillman Racing incurred substantial debt." After the Daytona 500, according to the complaint, Hillman and Falk agreed to terminate their partnership after the 2015 season.

Among the agreements the complaint states is that following the 2015 season, Circle Sport and Falk would "transfer all of their right, title and interest in and to the 33 points, and to all other property acquired by the Partnership to the remaining partners or an entity to be designated by them." In March 2015, then-counsel for Hillman Racing drafted a written "Purchase Agreement" for the termination of the partnership and transfer of assets, including the No. 33 car's points. The complaint states that Falk initially did not respond with any objection but later failed and refused to sign the agreement.

The complaint states that in Oct. 2015 Hillman was informed by NASCAR personnel that material terms of the charter system had been agreed upon. Court documents state that NASCAR informed Hillman that the field would be reduced from 43 to 40 cars and that 36 would receive charters. Hillman was informed that the #33 would receive a charter but not the #40.

In late January 2016, Circle Sport announced its merger with Leavine Family Racing. The complaint states that Hillman and his partners were not included in the discussions with Leavine and that the announcement came as a "surprise." The complaint states: "As a results of the circumstances described … the 40 points are of negligible value, the Partnership is unable to race full-time during the 2016 race season, Hillman and Hillman Racing have no ability to pay for the significant debt incurred in the 2013, 2014 and 2015 race seasons, and the remaining partners have been forced to liquidate many of the Partnership's remaining assets." See much more at NBC Sports.

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