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Legal issues follow local race team into 500 weekend

May 27, 2011

The local race team of Panther Racing LLC will be solidly represented in Sunday’s Indianapolis 500 by its two drivers, Buddy Rice and J.R. Hildebrand, who will start 7th and 12th, respectively.

But, off the track, a handful of lawsuits targeting Panther Racing have made for a bumpier ride.

Within the past year the IndyCar Series race team has been sued by a former employee, its former landlord and even one of its former drivers, mostly over allegations of not paying its bills.

The spate of litigation may seem unusual to open-wheel enthusiasts, who likely see Panther Racing as one of the series’ more solid teams.

It was founded in 1997 and is majority owned by fomer mechanic and team manager John Barnes. Jim Harbaugh, head coach of the San Francisco 49ers and former Indianapolis Colts quarterback, has a 17-percent ownership stake in the company.

Panther Racing has attracted a lucrative sponsorship from the National Guard in a deal that paid Panther Racing roughly $30 million from 2008 to 2010, according to court documents.

Zak Brown, CEO of Just Marketing International, a Zionsville-based motorsports marketing firm, described Panther Racing as “stable.” “They’re a credible team that appears to have good finances versus some of the teams out there that aren’t sure if they’re going to make it to next weekend,” he said.

On the track, former driver Sam Hornish Jr. won Indy Racing League championships for the team in 2001 and 2002, and past drivers Vitor Meira and Dan Wheldon both finished second in the Greatest Spectacle in Racing in 2008 and 2009.

Wheldon, however, filed suit in August in Marion Superior Court over unpaid wages resulting from his runner-up finish. The complaint said he had not been paid a $250,000 “performance incentive” and 40 percent of the prize money as a result of the finish, which amounted to a total of $383,400.  

The two sides quickly settled the dispute a few months later. But Wheldon, who won the Indianapolis 500 and the IndyCar championship in 2005 driving for another team, left Panther after two years for Bryan Herta Autosport.

Panther Racing remains entangled in two other lawsuits, and one in particular has become quite contentious.

Former employee Christopher Bowers sued the company in November, accusing it of fraud and violation of an operating agreement, as well as breach of contract and fiduciary duty.

Bowers, of Atlanta, worked at Panther Racing from March 2008 until January 2010 and claims he secured at least $34.7 million in sponsorships for the team, for which he has not been paid a commission.

He also alleges that Panther Racing made deceptive financial misrepresentations to him about the condition of the company that resulted in his agreeing to a $77,500 reduction in salary.

“The bottom line is he feels that he had both written and oral agreements that have been unsatisfied,” said his lawyer, David Mattingly of Ice Miller LLP.

Earlier this month, Marion Superior Court Judge Patrick McCarty denied Panther Racing’s motion to dismiss the suit. And on May 13 the company filed a counterclaim against Bowers that lists several charges against him.

“Due to the baseless allegations contained within the suit, Panther recently filed counterclaims against the disgruntled employee, including claims for libel, slander and abuse of process,” Panther Racing said in an e-mail. “Panther respects the legal system and plans to resolve these matters through the appropriate legal process.”

The team moved last May from its former headquarters at 5101 Decatur Blvd. on the city’s southwest side to new space on the same street, at 5740 Decatur Blvd.

Panther Racing’s former landlord, which consists of several entities, brought a suit against the team last June and accuses it of defaulting on its lease. The landlord said the company failed to pay one month back rent and previous late charges, which amount to a total of $37,919.

The court placed its former landlord, 1031 Decatur LLC, in court-ordered receivership in January. That has complicated the resolution of the dispute, Panther Racing said in its e-mail. Panther Racing also has counterclaims against the landlord stemming from its argument that it held an early-termination option.

A January mediation between the two sides was unsuccessful.

A lawyer for 1031 Decatur LLC declined to comment on the case.

 

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