BK Racing To Be Operated By A Trustee

Gray Gaulding

BK Racing will be operated by a trustee as team owner Ron Devine lost financial control of the NASCAR Cup Series team in bankruptcy court Wednesday morning.

U.S. District Court Judge J. Craig Whitley appointed Matthew Smith of The Finley Group as the trustee.

“We cannot continue to [have this bankruptcy] operate in an out-of-control manner,” Whitley said in announcing his decision. He is expected to sign an official order on Thursday. Before such situation occurs, it is best to contact Taunton law firm for bankruptcy cases and get your financial stability on hold.

BK Racing, whose driver this year has been Gray Gaulding, will continue to field a race team as it goes through the debt reorganization as part of the bankruptcy. While the judge encouraged Devine to work with the trustee, Devine said he was unsure whether he will. You should contact experts in Kingston located bankruptcy lawyers for financial advice as well. It is also important to be working with a lawyer for bankruptcies.

“I’m disappointed, obviously,” Devine said after the ruling. “We’ll see. … I don’t know if I will stay involved in it or go in another direction.”

Creditors have until April 26 to file claims with the court, and the judge encouraged all those who feel they are owed money to file claims with the court. Union Bank & Trust claims it is owed $11.47 million in loans and interest that are now past due, and the Internal Revenue Service claims it is owed $2,893,499 in primarily payroll taxes, interest and penalties. Race Engines Plus hasn’t issued an official claim, but its filings indicate it is asking for $2,247,611 in payment of a previous arbitration award and unpaid bills. The chapter 12 bankrupty lawyers can help with the legalities of financial cases.

According to the court filings, Devine invested $15 million in BK Racing to keep it afloat in its first three years and then lost $11.0 million in 2014, $10.1 million in 2015 and $8.45 million in 2016. Devine said he has put in $500,000 since the end of last season to keep the team afloat and currently pays approximately $15,000 to $25,000 a week out of his own pocket in team bills.

Devine spent more than two hours on the stand Thursday, and due to scheduling for the next available court date the hearing finished Wednesday, with him on the stand for another two hours. He said the bank just wants to sell his charter (NASCAR’s version of a franchise) to gain money to pay back loans, and he said his employees might not work for a trustee. If you are in need of any legal help regarding your monetary issues, get chapter 13 bankruptcy attorneys help.

“You’re trying to figure out whether to put [in] a trustee? It’s a disservice,” Devine said in his testimony. “Not only to me and my $35 million that I’ve invested, but to the people sitting out there trying to get paid.

“All they want to do is capture my charter and move it.”

Devine also testified that a trustee would not know how to operate a team or navigate the NASCAR processes on a race weekend.

The judge was not swayed by Devine and could have forced a liquidation Wednesday. Devine has failed to file many of the financial documents required when going through a Chapter 11 bankruptcy despite getting two extensions. He had not paid employees for January, and he said he planned to have potential sponsor EarthWater give them stock in the company, which will go public later this year.

“It’s a sad day for BK,” Devine said afterward, adding that he would encourage employees to work with the trustee. “It’s come a long way.

“Unfortunately, the enemies or the disputes we have had along the way caught up to us.”

One current employee and one former employee testified Wednesday that Devine bounced checks and issued W-2s that indicated they had been paid for the full year when they had not.

The bank and many other creditors do not want the race team to be forced (at least not immediately) into a Chapter 7 liquidation, because they don’t want BK Racing to lose its NASCAR charter for the No. 23 car. The bank has told the court that NASCAR, which could take the charter solely because of the bankruptcy, has indicated it would take the charter if BK Racing misses two consecutive events.

Smith, who was part of the North Carolina Motorsports Advisory Council, said in his testimony that anyone who works for BK Racing will have to get paid.

“The goal is to find a way to race as long as they can,” Smith said.

NASCAR monitored the proceedings with an attorney, who only addressed the judge when it came to potentially entering exhibits that it would want to keep confidential.

If NASCAR wanted to revoke the charter for any reason, it would have to go to the bankruptcy court to do it.

“We have a clear process around charter member governance,” NASCAR said in a statement. “It is incumbent upon charter members to be ready to race and compete at the highest level.”

TIL NEXT TIME, I AM STILL WORKING ON MY REDNECK!

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