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Stewart-Haas Racing files suit against sponsor of Danica Patrick’s team

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Stewart-Haas Racing filed a breach of contract lawsuit against Nature’s Bakery, the sponsor of Danica Patrick‘s team, Friday in North Carolina Superior Court.

The Associated Press first reported the suit.

Stewart-Haas Racing seeks $31.7 million in actual damages, plus interest. Nature’s Bakery was to pay $30.4 million of base fees for the remaining two years of the contract, along with another $1 million in other fees.

Stewart-Haas Racing stated in the lawsuit that the actions of Nature’s Bakery “set SHR up for a devastating loss of revenue just before the beginning of the 2017 race season; and rendered it nearly impossible for SHR to have any reasonable hope of mitigating its damages.”

Stewart-Haas Racing issued a statement Friday night:

“Nature’s Bakery is in material breach of its contract with Stewart-Haas Racing. It is an unfortunate situation, as the team has delivered on all aspects of its contract and was prepared to do so again in 2017. Ultimately, this is a situation that will be resolved in a court of law.

“Stewart-Haas Racing remains focused on its preparation for the 2017 NASCAR season where it will again field four entries in the Monster Energy NASCAR Cup Series while also introducing a full-time NASCAR Xfinity Series team. The litigation with Nature’s Bakery will not impact the organization’s on-track efforts.”

Stewart-Haas Racing stated in the complaint that “this is an action to recover substantial damages from the Defendants’ unfair trade practices and associated intentional and bad faith breaches of a multi-year primary sponsorship agreement associated with the #10 SHR race team.”

Stewart-Haas Racing stated in the complaint that after Nature’s Bakery expressed interest in 2015 in sponsoring Patrick’s team, the organization “expressed significant concern that Nature’s Bakery would be unable to afford a primary sponsorship of the magnitude it requested. Mr. (David) Marson, for himself, and the Marsons, for the Marson Trust, and Nature’s Bakery, provided repeated assurances that Nature’s Bakery had the cash flow and funds to meet all financial requirements of the proposed sponsorship agreement.”

The suit states that for the 2016 season, Nature’s Bakery was to pay $15,212,000 to sponsor the team. It was to pay the team $5 million on or before Oct. 1, 2015; $3,404,000 on or before Feb. 1, 2016; $3,404,000 on or before May 1, 2016; and $3,404,000 on or before July 1, 2016.

For 2017, Nature’s Bakery was to pay $15,212,000 to sponsor the team with the same type of payment schedule.

For 2018, Nature’s Bakery was to pay $15,212,000 to sponsor the team with the same type of payment schedule.

The complaint states with the contract set, Stewart-Haas Racing moved forward on other matters, including signing Patrick to a multi-year agreement that goes through the 2018 season.

The complaint states that “soon after executing the Sponsorship Agreement, Mr. Marson and Joe Marshall (Nature’s Bakery Chief Financial Officer) reached out to SHR executives, and stated that Nature’s Bakery was having cash flow issues, and asked if the payment amounts and deadlines in the Sponsorship Agreement could be modified to assist Nature’s Bakery with its cash crunch.”

Stewart-Haas Racing changed the payment schedule for 2016 for Nature’s Bakery to pay $2.5 million on or before Oct. 1, 2015;  $1 million on or before the 15th of each month from January to May 2016; and $1.928 million on or before the 15th of each month from June to September.

For 2017, the payment schedule was adjusted to $2.5 million on or before Oct. 1, 2016; $2.5 million on or before Dec. 1, 2016; and $3.4 million on or before the first day of February, May and July 2017.

Among the many extra benefits Stewart-Haas Racing provided Nature’s Bakery, according to the lawsuit, were two additional races free in 2016 when both Patrick’s car and the No. 14 car of Tony Stewart had Nature’s Bakery as a primary sponsor at the Dover race in October. The team also stated in the lawsuit that Stewart-Haas Racing helped Nature’s Bakery avoid track fees for activation access and “upon learning of the mold outbreak in Defendants’ product, SHR worked to open and dispose of many samples of Nature’s Bakery products that contained heavy mold, to avoid fans from receiving tainted product (and the resulting reputational issues that would surely follow).”

Stewart-Haas Racing states that Nature’s Bakery reached out to the team in late summer 2016 to modify the base fee payment terms, “representing that modification was again necessary due to Nature’s Bakery’s internal cash flow issues.”

The payment schedule was again changed. Nature’s Bakery was to pay Stewart-Haas Racing $1 million on before the 15th of each month from January to March 2017 and $2,042,400 on or before the 15th of each month from April to August 2017 and $1 million on or before the 15th of September and October 2017. The 2018 payment schedule also was adjusted.

Stewart-Haas Racing accused Nature’s Bakery of concocting “a scheme to avoid further payments” by claiming that Patrick had endorsed competing products and did not use her social media presence enough to promote Nature’s Bakery. Stewart-Haas Racing states in the complaint that “these claims are false.”

Stewart-Haas Racing states that “the thrust of Nature’s Bakery’s complaints about Danica Patrick supposedly endorsing competing products is her personal endorsement of Six Star Pro Nutrition’s protein powder. Protein powder is not competitive with fig bars or brownies. Furthermore, Danica Patrick had been endorsing Six Star Pro Nutrition’s protein powder, publicly, for many months prior to the execution of (the) Sponsorship Agreement, and continued to do so afterwards.

“Never once did Defendants claim that her doing so amounted to a breach of the Sponsorship Agreement (nor could it, because, again, the protein powder is not a competing product).  … Danica Patrick never endorsed Six Star Pro Nutrition’s protein bars. Worse, Nature’s Bakery “liked” numerous of Danica Patrick’s Instagram posts regarding Six Star Pro Nutrition and other protein powders. Clearly, even Nature’s Bakery did not consider Danica Patrick to be endorsing a competing product, until it decided to drum up reasons to terminate the Agreement.”

The suit says Nature’s Bakery sent a letter to Stewart-Haas Racing on Jan. 19 seeking its desire to terminate the sponsorship agreement.

Stewart-Haas Racing stated in the lawsuit: “In every respect, SHR complied with its obligations under the Sponsorship Agreement.

“In every respect, Defendants materially breached their obligations under the Sponsorship Agreement, and did so using unfair, deceptive, manipulative and bad faith tactics.

“Left with no options to protect its rights and interests, SHR files this action seeking to recover all amounts due pursuant to the Sponsorship Agreement, plus interest, and all other damages.”

Nature’s Bakery served as the primary sponsor on Patrick’s car for 27 points races last year along with what was called the Sprint Unlimited and the Sprint All-Star Race. Nature’s Bakery was to have served as the primary sponsor of Patrick’s team for a minimum 25 races this season, according to the lawsuit.

Patrick appeared at last week’s NASCAR Media Tour in her TaxAct uniform instead of a Nature’s Bakery uniform, raising questions about the company’s primary sponsorship of her team.

The Nature’s Bakery website does not contain references to Patrick, Stewart-Haas Racing or NASCAR.

Messages to representatives of Nature’s Bakery about this matter have yet to be returned.

Click here to view the lawsuit

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Matt Kenseth wrecks out of Auto Club 400 on late restart

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Matt Kenseth crashed out of the Auto Club 400 on a restart with 16 laps remaining in the race at Auto Club Speedway.

Kenseth had restarted fourth following a caution for an incident involving Gray Gaulding.

Kenseth was in the middle groove exiting Turn 2 when he was tapped from behind by Martin Truex Jr. and slid toward the inside wall, which his No. 20 Toyota hit hard. The Joe Gibbs Racing driver was cleared and released from the infield care center.

It is Kenseth’s third DNF in the first five races of the season and his second in as many races. He had four in all of 2016.

Kenseth entered the race 20th in the point standings.

Martin Truex Jr. has commanding performance in Stage 2 win at Fontana

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Martin Truex Jr. has taken over as the most dominating driver in today’s Auto Club 400 at Auto Club Speedway in Fontana, California.

After pole-sitter Kyle Larson won the first 60-lap stage, Truex won Stage 2. During the session, Truex’s car showed supremacy with nearly a seven-second lead in the closing laps of the stage.

Truex has now won three of the last six stages, having captured both stages two weeks ago en route to his overall race win at Las Vegas.

Larson is in second place, followed by Chase Elliott, Clint Bowyer, Erik Jones, Jamie McMurray, Kyle Busch, Joey Logano, Denny Hamlin and Brad Keselowski.

There has been just two cautions in the race – both coming in Stage 1.

We now move to the final stage, an 80-lap shootout to determine the race winner.

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Kyle Larson wins Stage 1 of Auto Club 400 at Fontana

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Pole-sitter Kyle Larson is almost one-third of the way to winning Sunday’s Auto Club 400. The California native won Stage 1 of the race at his home-state Auto Club Speedway in Fontana, about 50 miles east of Los Angeles.

Larson (43 laps) and Martin Truex Jr. (12 laps) have led the majority of the laps during the opening 60-lap segment. That segment will be followed by another 60-lap segment, and then an 80-lap final section for 200 laps (400 miles) around the 2-mile low-banked track.

It was Larson’s first stage win of the 2017 season under the new enhanced scoring format in the NASCAR Cup Series. Larson has finished runner-up in each of the last three races and four of the last five (dating back to the 2016 season finale). He has just one career Cup win, last year at Michigan.

Truex is running second, followed by Chase Elliott, Jamie McMurray and Kyle Busch.

Sixth through 10th are Clint Bowyer, Joey Logano, Erik Jones, Ryan Blaney and Denny Hamlin.

Each of the top 10 finishers in Stage 1 will earn stage points in the NASCAR Cup standings.

Two incidents of note occurred early in the race, both involving Brad Keselowski:

* On the first lap, Keselowski’s car suffered left rear damage when several cars were involved in an accordion-like wreck. Others involved included Kevin Harvick, Ryan Newman and Denny Hamlin, but there was no caution called.

* Keselowski continued on without repairing the damage and was spun out on Lap 3 when he was hit from behind by Jimmie Johnson, causing further damage to Keselowski’s Ford Fusion. The caution came out for Laps 5 through 7. Johnson claimed there was little or no damage over his team radio, but Johnson has continued to have struggles this weekend. He’s running 32nd, one lap down.

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Bad race start results in damaged cars for Brad Keselowski, Ryan Newman and Kevin Harvick

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A bad start by the inside lane at the beginning of the Auto Club 400 resulted in damage to the cars of Brad Keselowski, Kevin Harvick and Ryan Newman.

Denny Hamlin struggled to get to speed at the drop of the green flag, causing the first few rows of cars to bunch up. It resulted in Newman making contact with Keselowski’s left rear and causing damage. Harvick then ran into Newman as the inside bottlenecked.

On Lap 4, after falling back to 17th, Keselowski was hit from behind by Jimmie Johnson on the front stretch, which sent the No. 2 car spinning through the infield grass. Keselowski, the Atlanta winner, was 19th and the first car a lap down when the first stage ended.

During pit stops in the resulting caution, large amounts of tape were put on the front bumper and grille of Harvick’s car and the right-front fender of Newman’s.

With 35 laps left in the first 60-lap stage, Harvick was forced to pit for a flat right-rear tire. He now runs in 28th, a lap down. Newman, who won last week at Phoenix, a lap down in 22nd.

Johnson, a six-time Auto Club winner and the defending winner, was told his No. 48 had damage that could easily be fixed in the pits.  He runs in 20th a lap down. Johnson is winless this season.