More bad news for the future of the Champ Car Series
source:
speedtv.com
The proposed buyout of CART by Open Wheel Racing Series, the holding company
owned indirectly by a group of investors including Champ Car owners Gerald
Forsythe, Kevin Kalkhoven and Paul Gentilozzi, appears to be off, 16 days in
advance of the scheduled shareholder vote on the deal. CART and OWRS are now
exploring alternative arrangements, further clouding prospects for the 2004
Champ Car season that is currently set to begin April 18 on the streets of Long
Beach.
According to a statement by CART, representatives of OWRS "informed the company
that OWRS believes that a number of conditions of the pending merger between the
parties will not be satisfied by the time of the special meeting." A major
sticking point appears to involve the number of cars that will run in the series
next season. CART says that it "expects that there will be a net decrease" in
the number of teams for 2004, which will almost certainly mean that there will
be less than 18 cars on the grid. This would be classed as a "material adverse
effect," which violates one of the conditions of the OWRS bid.
CART's board of directors is now evaluating available alternatives to the
merger, including the possibility of ceasing operations, winding up the
company's affairs and liquidating its remaining assets. Meanwhile, OWRS has
proposed an alternative transaction under which Championship Auto racing Teams
and and its subsidiary, CART, Inc., would commence reorganization under Chapter
11 bankruptcy protection.