Champ Car files bankruptcy

March 6, 2008
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Champ Car Wednesday filed Chapter 11 bankruptcy, igniting what could potentially be a bidding war for its assets. The Indy Racing League last month agreed to acquire certain assets of Champ Car, but the bankruptcy court could open things up. “To the extent that another buyer would come in and pay more, that would be better for the creditors,” said Jeffrey A. Hokanson, an attorney with the Indianapolis-based law firm Hostetler & Kowalik, which represents Champ Car. If another bidder offered a higher amount, Hokanson said IRL officials could counter offer. “It can amount to an auction,” he added.

But motorsports experts don’t expect another suitor to swoop in this time. “A judge certainly has the right to hand it over to another buyer if one shows up, but I don’t anticipate that,” said Tim Frost, a Chicago-based motorsports business consultant. “This is part of the procedural motions Champ Car had to go through to make the transaction with the Indy Racing League happen. I believe this is the final chapter of open-wheel unification.”

A likely scenario, Hokanson said, is for the bankruptcy to be used as a tool to complete the IRL-Champ Car unification, and to sell the remaining assets such as engines, chassis and office furniture and supplies to satisfy creditors.

The filing, submitted in U.S. Bankruptcy Court in Indianapolis, showed that the Indy Racing League essentially paid $10 million for all of Champ Car’s intellectual property rights, a mobile medical unit and a non-compete agreement and consulting fee for Champ Car co-owners Gerald Forsythe and Kevin Kalkhoven. The filing, however, states that Forsythe and Kalkhoven would use $4 million to promote the Long Beach Grand Prix in April.

The filing indicates Champ Car has between $10 million and $50 million in assets and owes between one and 49 creditors between $1 million and $10 million. Most of the assets likely have a very limited number of potential buyers, which could bring the value down. The creditor with the largest claim is Cosworth Inc., a California engine maker owned by Kalkhoven and Forsythe, which is owed $1.83 million. Several of Champ Car’s former teams are owed money, including PKV Racing, which is owed $645,883; RuSport Inc., which is owed $424,861 and Forsythe Championships Racing, which is owed $327,961.

Today, Champ Car lawyers moved in court to keep paycheck flowing to 20 Champ Car employees, who are responsible for preparing for the race in Long Beach.

Will open-wheel unification truly happen this time?
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  • Looks like there is no other choice but for unification to happen. Costworth and the three teams you mentioned are all owned by the owners of Champ Car. If they didn't even have the money available to pay themselves there is no way they would be able to pay all their employees, other teams, tracks, ESPN and everyone else the need to put on a race series. It looks like

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  1. Now if he'd just stay there...

  2. Daniel - what about the many US citizens who do NOT follow what the Bible teaches? The Hindus, Jews, Muslims and others who are all American citizens entitled to all rights as Americans?? This issue has NOTHING to do with "What the Bible says..." Keep all Churches separate from State! Pence's ongoing idiocy continues to make Indiana look like a backwards, homophobic state in the eyes of our nation. Can't we move on to bigger issues - like educating our kids?

  3. 1. IBJ should link to the referenced report. We are in the age of electronic media...not sharing information is lazy. Here is a link http://www.in.gov/gov/files/Blue_Ribbon_Panel_Report_July_9_2014.pdf 2. The article should provide more clarity about the make-up of this panel. The commenters are making this item out to be partisan, it does not appear the panel is partisan. Here is a list of the panel which appears to be balanced with different SME to add different perspectives http://www.in.gov/activecalendar/EventList.aspx?view=EventDetails&eventidn=138116?formation_id=189603 3. It suggests a by-pass, I do not see where this report suggests another "loop". 4. Henry, based on your kneejerk reaction, we would be better off if you moved to another state unless your post was meant as sarcasm in which case I say Well Done. 5. The article and report actually indicates need to improve rail and port infrastructure in direct contradiction to Shayla commentary. Specifically, recommendation is to consider passenger rail projects... 6. People have a voice with their elected officials. These are suggestions and do not represent "crony capitalism", etc. The report needs to be analyzed and the legislature can decide on priorities and spending. Don't like it, then vote in a new legislature but quit artificially creating issues where there are none! People need to sift through the politics and provide constructive criticism to the process rather than making uninformed comments in a public forum based on misinformation. IBJ should work harder to correct the record in these forums when blatant errors or misrepresentations are made.

  4. Joe ... Marriage is defined in the Bible ... it is mentioned in the Bible often. Marriage is not mentioned once in the US or Indiana Constitution ...

  5. Daniel - Educate me please: what does the Bible have to do with laws? If the government wasn't in the business of marriage to begin with, then it wouldn't have to "define" marriage at all. Marriage could be left as a personal, religious, or otherwise unregulated action, with no ties to taxes, legal status, etc. Then people could marry whomever they want, and all this silliness would go away. Remember to vote Libertarian in November.

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