It looks like the fat lady is coming to the podium

[Dov]

Welcome to 10/TENTHS, Ac.!

[Ac.]

Thanks Dov. I've been following the forums for a while and finally decided to sign in. Greetings to the moderators!

[Fogelhund]

Welcome to the forum Ac.

Unfortunately, there is NOTHING in this $2 million deal for the shareholders. It is not a purchase of stock, it is a purchase of assets, with the declaration that CART must declare bankruptcy by Friday of next week.

[indycool]

True, Ac. But shareholders aren't going to get anything out of this now, anyway. If the CART BoD and Pook had considered liquidation back when they knew this was inevitable, shareholders would've gotten more value, too. But they blindly continued to burn off the money.

Of course they're going to cut their best deal. But CART has played into OWRS' hands lock, stock and barrel to where shareholders and creditors are both pretty much screwed.

Let's put it this way. If you're a creditor and you get the shaft on this deal, what would make you think that you'd like to do business with the new company? If you're the City of Miami and you're pretty much getting stiffed on a $2 million loan for a public company to have a street race and some of the guys who were involved in the race as car owners are the new guys taking over the deal, you say, fine, then YOU guys put up $2 million in 30 days, then we'll start talkin' to you again.

OWRS will be regarded as pigs out of the same poke by many involved in this deal.

[Jay]

Don't have time right now to check the financial statements, but who are CART's creditors and what are they owed?

I think future promoters, sponsors etc will care about OWRS dealings with CART about as much as the money-driven shareholders will care about CART-style racing continuing - not much. They're completely separate deals.

[indycool]

Creditors:

1. City of Miami, Raceworks loan defaulted.

2. The teams. According to the latest OWRS offering, they'll take care of paying teams '03 purses. I take that to mean some are UNPAID.

3. ISC/Fontana.

4. Golden parachutes for Pook, Carter, Clare and Lopes.

5. Lots of lawyers.

To start with.......

[paul-collins]

Originally posted by Fogelhund
Welcome to the forum Ac.

Unfortunately, there is NOTHING in this $2 million deal for the shareholders. It is not a purchase of stock, it is a purchase of assets...

...one of those assets being the CART name and logo. Pretty nifty deal for OWRS, if they get to call themselves CART and leave all the liabilities to the old (ex-CART) company...

[Jay]

Apart from #2, those are speculative expenses to be incurred though(and possibly not for some time in some cases...), and not liabilities...

I'm just wondering, right now, what does CART currently owe? If they went to bankruptcy court, who would be the creditors looking them in the face? I know 2003 purses is one thing, salaries another, some accounts payable...what else? any dollar figures? I'll look it up when I get home...

[Fogelhund]

Liabilities at the end of September 30, 2003, and that is the most current number we have, is $18 million.

At that point in time, there was only $19.5 million in cash and short-term investments.

There has obviously been further expenses and liabilities since then.

There are in addition at least three current law suits that I am aware of.

You can guarantee that there will be other suits, most notably from Vannini. (speculation)

The net liquid position is undoubtably less then zero.

[indycool]

Jay, they ARE liabilities. You can even have a situation where Pook & Co., are in the creditors' line for their parachute cash, or file suit for it. Their parachutes are on public "paper." The City of Miami's stake is well-documented in CART's SEC filings. I don't know how you could call these anything BUT liabilities.

[Zinger]

How may are secured creditors I imagine the deal would mean coworth are paid or no engines next year, Miami are paid or no race next year and the entitlements of employees usualy secured under law. what Bank Loans do CART have. These sort of liabilities would mean the $2 Million for Assets would be eaten up very quickly. The Board of CART have a duty to stockholders to purse a more fruitful asset sale of risk prosecution or civil action against them.

[Fogelhund]

http://www.sptimes.com/2003/12/07/Sp...it_for_r.shtml

[indycool]

Fogelhund, I read that earlier. McAlpine has made some very strong statements lately regarding how business is being conducted in CART/OWRS.

[Fogelhund]

Of interest was his suggestion that the drop dead date for Long Beach was mid-January. I'm not sure if that is HIS suggestion, or inside information.

[indycool]

That wasn't quite clear but it "kinda leaned" toward inside information.

[rush1]

Originally posted by Fogelhund
http://www.sptimes.com/2003/12/07/Sp...it_for_r.shtml

"Nobody is going to pay CART a sanctioning fee," McAlpine said. "It's like the Roach Motel. You can check your money in, but it's never coming out. Right now, Dover is looking at a drop-dead date of mid-January for Long Beach. If they don't get that moving, who would put up money for a CART race then?"

The clock is ticking...

[jjspierx]

Originally posted by paul-collins


Atlantics - where do they fit compared to Star Mazda (which IMSA sanctions) or Fran-Am (which used to be sanctioned by Grand Am)? Are they high enough to be equivalent to F3000, and really differentiate themselves from the new Fran Am cars? Frankly, with the fields they had last year, I had written them off already.

Star Mazda used to be a definite step down from Atlantics, only 170HP, steel tube chassis, gated shifters, and generally all old technology. This years F Mazda however has 240HP and uses the new Mazda Renesis Rotary engine. The chassis is now a carbon fiber monocoque, and they have sequential no lift shifters. Should be interesting to see how they fair against Atlantics on the same tracks. As for Fran-Am 2000, well they have a serious handicap in HP compared to the Barber Dodge Pro series, however they still run almost identical lap times at the same tracks do to there superior design and handling. Fran-Am V6 is starting up this year, and they have something like 600hp, so that would be more in the lines of an "f3000" type series.

[paul-collins]

So, Jeremy, do you see the need for Atlantics to continue at all? Especially when fields of OW racing are low all over...

[macdaddy]

I guess it's up to Toyota!

[Fogelhund]

I didn't want to post this in the thread that talks about this article.

"Nothing is going to change as far as scheduling," Gentilozzi said, refuting rumors than OWRS will create a 2004 schedule by cherry-picking the most developed events. "Champ Car will show up in Denver and race. We are buying the assets in a company, the contracts. There is no renegotiation."

http://www.denverpost.com/Stories/0,...822547,00.html

I cannot agree that this statement, if taken at face value is a good thing. How is this going to address the economic realities?

OWRS, however, bowed out of its original offer last week, saying a number of conditions in the contract could not be met by CART, including commitments from teams to produce at least 18 cars.

Gentilozzi said he expects to present affidavits from team owners to a bankruptcy judge, showing OWRS has commitments to field at least 18 cars.

Huh? What? So, OWRS backed out of this deal, because there wasn't commitment from 18 cars to CART, yet in the same week, suddenly there is 18 cars, but committed to OWRS.

So, OWRS is going to run things the exact same as in the past, but without payouts to teams, and has written commitment that these teams have financial backing that wasn't there a week ago. Right. Where exactly is the improvement from CART, and where is the money coming from?

If PG is telling the truth in his plans, then fans of Champ Car should be very scared.

[indycool]

Fogel, the only thing I can think of that may make both statements reasonably accurate is that, in the course of negotiating the "out" on the first proposal, the OWRS owners said, "Okay, without our four or five cars, you don't have enough, so we're out on this deal." Then, a week later, their cars are added back in to the equation.

But Gentilozzi's affidavits certainly remind me of "25 letters of intent" back in August, 2002.