BK Racing owner explains reason for filing Chapter 11 bankruptcy
DAYTONA BEACH, Florida — BK Racing owner Ron Devine said his team filed Chapter 11 bankruptcy to keep Union Bank & Trust from taking control of the team’s charter and selling it.
BK Racing filed Chapter 11 bankruptcy Thursday afternoon in Western District Court of North Carolina. In its bankruptcy filing, BK Racing estimated the number of its creditors as 50-99. The team estimated its assets as more than 10 million and estimated liabilities of more than $10 million.
The filing came shortly before a hearing was scheduled Thursday in Mecklenburg County Superior Court on Union Bank and Trust’s request to have a receiver to oversee BK Racing’s collateral. Union Bank & Trust claims that BK Racing owes it more than $8 million in outstanding loans. Among the most valuable pieces of BK Racing’s collateral is the charter it has for the No. 23 car that Gray Gaulding will drive in the Daytona 500.
“I filed (Chapter 11 bankruptcy) because the bank wouldn’t stop trying to get a receiver (to oversee the team’s collateral),’’ Devine said. “The only reason they wanted to get a receiver was to push the charter off to their third-party offer. That’s where the problem was.’’
Devine said he felt that he and the bank came close to resolving their issues before time ran out. He plans to meet with the bank next week and continue discussions.
The Chapter 11 bankruptcy listed 20 creditors with the largest unsecured claims. The largest was to Race Engines Plus for $569,539.95. Devine said matters have been resolved for the team to use the company’s engine and race this weekend but more needs to be done.
“We’re either going to fix it or we’re going to have to change,’’ Devine said of the engine company. “I think the relationship is what has to be fixed between me and Joey (Arrington, founder of Race Engines Plus). Fixed or changed or something. I actually think (Chapter) 11 will help us be able to have a conversation.’’
So how does Devine, who has owned various businesses and been involved in commercial and residential real estate development for more than 30 years, find himself in a such a financial position with his race team?
“I think it’s a tough business,’’ he said. “I think it’s an expensive learning curve. You’ve got to decide where you are taking the company. I took it down a very independent route. Probably wasn’t the smartest. I think the right thing to do is get an alignment.
“If I had any inclination of getting out, I would have let them do the receiver and just gone quietly into the sunset. I still see in the last unpioneered sport in the country, that NASCAR is going to be one of the premier sports in this country and I want to be a part of that. I still believe that. I think it’s going to be spectacular. I think it’s going through a transition. It’s headed in the right direction.’’
How does he get his team to where he wants to be competitively?
“We got to stop the nonsense,’’ Devine said. “We’ve got to get this thing worked out with this bank. Then we’ve got to get ourself together and on a platform that we can run and race competitively.’’