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Bankruptcy judge approves sale of BK Racing to Front Row Motorsports

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CHARLOTTE, N.C. — A day after he put his team in Chapter 11 bankruptcy, BK Racing owner Ron Devine alternated between being combative and conciliatory as he spoke to reporters outside his hauler in the Daytona International Speedway garage.

Losses in the millions, a pile of debt and a bank eager to get more than $8 million back in loans and accrued interest led Devine to go to court to protect his team and its charter — the one item that gave his underfunded team its greatest value.

The paperwork was filed, according to court documents, about 30 minutes before a Feb. 15 hearing in Mecklenburg County Superior Court. That hearing was in regards to Union Bank & Trust’s request of a receiver to operate BK Racing and a preliminary injunction to prevent the team from selling or leasing its charter.

“We’ll get it resolved,” Devine said 48 hours before the Daytona 500. “I promise you, we will get it resolved. The bank wants it resolved, and I want it resolved. We will get it resolved. And I’ll see you in Homestead (for the season finale).

“We will be in Homestead.”

Devine was right six months ago. It got resolved.

But left him without a team.

Judge J. Craig Whitley approved the sale of BK Racing — a team Devine helped bring to Cup in 2012 — to Front Row Motorsports for $2.08 million on Thursday.

In announcing his decision, Whitley called the matter “just a bad situation and we’re doing the best we can with it. I don’t expect anybody to be delighted by it, but it is what it is.”

Devine and the team’s engine supplier objected to the sale Thursday. During an early recess, Devine spoke with the attorney for Union Bank & Trust. After the brief discussion, Devine shook his head, walked away and said: “Then that will do it. Jesus Christ.”

Devine and the team’s engine builder urged the judge to let the team continue through the rest of the season and be sold then. Devine stated that he would be an interested buyer then. Devine, it was noted in court, had made an unqualified bid to get the team back.

On the stand, Devine made a last-minute appeal to the judge not to sell the team: “This is wrong to occur during the season. There is the ability to run the team through the end of the season.”

Devine called it a “misconception that this team is on the brink of collapse.”

Trustee Matt Smith, appointed by the court to take over the team from Devine in late March, said Thursday morning on the stand that “cash continues to be very, very tight.”

Smith also said on the stand that “without sponsorship, I run about $30,000 to $50,000 in the hole” per race. Smith expressed concerns that he would be able to run the team through the end of the season.

The charter requires teams to compete each weekend. If the team missed races, it would allow NASCAR to take the charter back and leave BK Racing with little value. While Smith and many others expressed disappointment that the bidding didn’t generate any more money, Smith recommended the sale take place.

When Devine questioned Smith on cross examination about how long it took for him to provide info on the team’s financial status, Smith said: “The business records you had were atrocious.”

After the hearing, Devine said: “That trustee at the very least ought to be embarrassed. He should have stopped it with one bidder. I just think he was in over his head.”

The judge didn’t see it that way and awarded the charter and assets to Front Row Motorsports. The judge also approved the sale of equipment and 19 chassis (primarily in storage and in various stages of readiness) for $265,000 to Obaika Racing and a hauler to Rick Ware Racing for $35,000.

Front Row Motorsports gets BK Racing’s charter, which guarantees a starting spot in every race and a set amount of money per event, and some of its assets, including the cars it is running. Front Row Motorsports was expected to close on the sale as early as Thursday afternoon. All of BK Racing’s employees will be retained as part of the agreement.

Front Row Motorsports now owns both charters that went to BK Racing when the charter system was created before the 2016 season. BK Racing sold a charter to Front Row Motorsports in December 2016 for $2 million, a sale that did not include any other assets.

Front Row Motorsports, a Ford team will run the former BK Racing team, a Toyota team, as a separate entity through the end of the season.

Jerry Freeze, general manager of Front Row Motorsports who attended court Thursday, said the team will not change manufacturers after this season. He also said he did not know who the driver of the BK team will be for next weekend’s Southern 500 at Darlington Raceway. Or if the car number will change from No. 23 to No. 35, a number Front Row Motorsports has used for a third entry at times.

Freeze said the team wants to expand to three full-time cars but admits it will be challenging to find the sponsorship at this point to do so for next year. An option for the team would be to lease two of its charters to other teams — it already leases a charter to TriStar Motorsports and could continue that relationship. Charters can be leased once every five years.

“You’ve got to imagine we’ve been assessing the market for who would need to lease a charter next year and who might be interested in buying one of the other charters that we have,” Freeze said after the hearing. “So we think there’s a market out there for sure. It was worth taking the chance and opportunity to see if we could get this one.”

Front Row Motorsports’ bid topped a bid from Mike Beam, president of GMS Racing.

That a Cup team’s fate was settled in a U.S. Bankruptcy courtroom showed how far BK Racing had fallen. Six weeks after Devine filed Chapter 11 bankruptcy, he lost control of the team when Smith was assigned as trustee. Devine called the judge’s action then “a sad day for BK.’’

It wouldn’t have to come to that had the team been more fiscally responsible. Court documents show that team lost $29.5 million from 2014-16. Court documents show that the team “budgeted” for a loss of $1.358 million in 2017 in what was described as a “skeletal budget.”

Then, there was the millions owed Union Bank & Trust for the numerous loans (now up to more than $9 million). The IRS filed court documents on March 12 that stated it had a secured claim of $2.5 million and a priority claim of $328,792.47 owed. A former employee and current employee at the time testified in March about having paychecks bounce last year. A former employee said he had a paycheck bounce in September 2017, November 2017 and December 2017 before leaving the team.

In May, court documents listed secured claims against the team at $31.6 million. That included $15 million to the Virginia Racers Group, which included Devine and started the team. Court documents also listed unsecured claims at $773,569.17 and non-priority unsecured claims at more than $5 million.

Smith decided this summer that it was in the best interest to sell the team.

“One of the reasons, and I know that Mr. Devine is in the room and probably doesn’t want to hear this, but I think one of the reasons this team is in trouble is it had the wrong owner,” Smith said in court on July 26. “So I believe the right owner, transition of ownership, would be the best thing for this team.”

Smith stated that day that “the cash flow (for the team) is exceptionally tight” and questioned then about going beyond the end of the season.

With all the money spent, BK Racing rarely ran anywhere close to the front. The organization, which fielded up to four cars at times, had three top-10 finishes in its history.

Sunday, in its last race as BK Racing, Blake Jones finished 27th, 15 laps behind the leaders. Only three other cars that made it to the finish ran fewer laps than Jones.

“It’s a tough business,” Devine said in February at Daytona when asked why he didn’t align with another team to help defray costs. “I think it’s an expensive learning curve. I also think … you’ve got to decide where you are taking the company and I took it down a very independent route, which probably wasn’t the smartest (thing).”

But Devine was not deterred Thursday. As he stood outside the federal courthouse awaiting an Uber ride to the airport, he said he still wanted to be in NASCAR as an owner.

“I’ve got other options,” he said.

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Chase Elliott, Kyle Larson to pursue $100K bounty in Truck Series

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The $100,000 bounty on Kyle Busch has its first contenders.

Chase Elliott and Kyle Larson each confirmed Thursday evening on Twitter that they’ll take a shot at the bounty placed by Kevin Harvick and Marcus Lemonis last week.

Elliott will compete in the March 14 Truck Series race at Atlanta Motor Speedway and the May 30 race at Kansas Speedway with GMS Racing. Larson will compete with GMS Racing in the March 20 event at Homestead-Miami Speedway.

Elliott will be sponsored by Hooters for the Atlanta race.

The declarations by the two drivers came the same day that Busch said he didn’t believe any full-time Cup Series drivers would go after the bounty.

Elliott has 12 career Truck Series starts. His last two, at Atlanta and Martinsville in 2017, came with GMS Racing. Elliott won the Martinsville race. Busch was not in that race.

“Once the word got out about the challenge, we were able to put this together with Mike Beam at GMS in just a couple of days,” Elliott said in a press release. “Atlanta is one of my favorite tracks, so I’m really looking forward to getting back into a GMS truck there with Hooters on the truck and make a run for a win.”

Larson has 13 career starts and his last three, including a win at Eldora and top five at Homestead in 2016, came with GMS Racing.

“When I heard about the $100,000 bounty I wanted in!” Larson said in a press release. “I’m thankful for GMS and Chevy giving me this opportunity, Homestead is one of my favorite tracks so looking for to the challenge!”

There’s a potential third bounty hunter waiting in the wings.

Not long after Larson’s announcement, Denny Hamlin, Busch’s Joe Gibbs Racing teammate, tweeted that he’s acquired the funding to field a ride. There’s just one hangup, and it’s Kyle Busch Motorsports:

The $100,000 bounty against Busch was proposed by Harvick and Lemonis, CEO of Gander RV & Outdoors, last week. It will go to any full-time Cup Series driver who beats Busch in any of his remaining four Truck Series starts this year. Busch has won the last seven Truck Series races he’s entered.

If Elliott or no other Cup driver beats Busch in those four races, the bounty will go to the Bundle of Joy Fund, the organization founded by Kyle and Samantha Busch that helps couples who require fertility treatments to conceive.

“We are blessed with this opportunity. To have an owner that is up for the challenge and a manufacturer that will support the extra effort necessary is really special,” said Mike Beam, President of GMS Racing, in a press release. “It’s great to have these two talented young men back behind the wheel for us and to have the extra attention on the Truck series is great.”

Kyle Busch: $100K Truck Series bounty is a losing proposition

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Kyle Busch doesn’t believe any full-time Cup Series driver will attempt to claim the $100,000 bounty placed on him last week by Kevin Harvick and Marcus Lemonis.

Harvick and Lemonis, the CEO of Truck Series sponsor Gander RV & Outdoors, said they’d award that bounty to any full-time Cup Series driver who is able to beat Busch in any of his four remaining Truck Series starts this year.

Busch, who has won the last seven Truck races he’s entered, sees the challenge as a losing investment, especially if someone attempted it in one of Kyle Busch Motorsports’ Toyotas.

Thursday on the Barstool Sports’ “Rubbin’ is Racing” podcast, Busch said it costs $140,000 to rent one of his Trucks for a race.

“Right off the bat (it’s a losing proposition),” Busch said. “It’s not going to happen. Nobody is going to pay the 140 grand to rent a truck, whether it’s from me or from somebody else. (Show co-host Clint) Bowyer didn’t tell you the fact he can’t even rent a truck from me because I’m a Toyota team and he drives for a Ford team. So he has to go find a Ford truck in order to drive. So there’s those complications that fit into all of this, too.”

Denny Hamlin, Busch’s teammate at Joe Gibbs Racing, expressed his interest in the bounty, as well Richard Childress Racing’s Austin Dillon, who said he was “working on” a deal.

After his win last Friday at Las Vegas Motor Speedway, Busch’s four remaining Truck Series starts are:

March 14 at Atlanta Motor Speedway

March 20 at Homestead-Miami Speedway

March 27 at Texas Motor Speedway

May 30 at Kansas Speedway.

If no one beats Busch, the bounty will go to the Bundle of Joy Fund, the organization founded by Kyle and Samantha Busch that helps couples who require fertility treatments to conceive.

NASCAR America presents MotorMouths at 5 p.m. ET

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Today’s episode of NASCAR America’s MotorMouths airs from 5-6 p.m. ET on NBCSN.

Marty Snider hosts and is joined by Kyle Petty, Steve Letarte and Nate Ryan.

James Hinchliffe will call into the show to discuss his new role as an analyst for NBC’s coverage of IndyCar, Indy Lights, IMSA and NASCAR.

You can call into the show via 844-NASCAR-NBC or submit your questions/comments via Twitter using #LetMeSayThis.

If you can’t catch today’s show on TV, watch online at http:/nascarstream.nbcsports.com. If you plan to stream the show on your laptop or portable device, be sure to have your username and password from your cable/satellite/telco provider handy so your subscription can be verified.

Once you enter that information, you’ll have access to the stream.

Click here at 5 p.m. ET to watch live via the stream.

Auto Club Speedway’s old surface provides ‘moving target’ for drivers

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Auto Club Speedway has a lot of character.

It’s a character that comes from the 2-mile track’s racing surface being among the oldest on the NASCAR circuit.

The surface hasn’t been repaved since the track first opened in 1997. That’s the same year that the surface for Atlanta Motor Speedway was last resurfaced (a planned repave was put on hold indefinitely in 2017 after outcry from drivers).

In the 23 years since, races at the track in Fontana, California, have turned into producers of multi-groove spectacles (especially on restarts) that come at the cost of high levels of tire wear.

The aged surface provides a “moving target” to drivers throughout the race weekend, according to Tyler Reddick.

“During the start of the weekend, you have to watch for the seams since it’s so slick out there,” the rookie Cup driver said in a media release. “Normally, the Xfinity cars are the first ones on the track, so I’m normally very careful. Now that I’m in the Cup Series, it may be a little different. I think this weekend will be fairly similar to Las Vegas where we started out running wide open, and I’ll have to run like that until the handling starts to go away in our No. 8 I Am Second Chevrolet (and) you have to start lifting. Then it’ll be important to assess why the handling is changing and how to adjust our car correctly to battle that.”

Cup and Xfinity teams only visit Auto Club Speedway once a year and this will be the second year they’ll do so with the high downforce aero package.

Joe Gibbs Racing’s Erik Jones believes Sunday’s Auto Club 400 (3:30 p.m. ET on Fox) will be a “different race” from the one seen last year.

“Going into Fontana last year, no one really knew what we needed car-wise, balance-wise and this year we have a whole notebook to look back on to try to get better,” Jones, who finished 19th in last year’s race, said in a media release.

“I think there will be a lot more lifting, the cars will be faster. Everybody has just gotten their cars better and more efficient and faster on the straightaways and that makes for more lifting in the corners. It will probably be a little different race, but Fontana is always a good show.”

But that show depends on where a driver chooses to run around the track.

Racing along the top of the track compared to running in the bottom lane proves for “two completely different types of racing” according to defending race winner Kyle Busch.

“You can run from the top to the bottom but, when you run the bottom, you really feel like you’re puttering around the racetrack,” Busch said in a media release. “You feel like you aren’t making up any time on the bottom. But when you are running the top groove, you feel like you’re getting the job done. The guys who run the bottom have a little bit more patience and handle it better than the guys who are on the gas on top.”

When it comes to how rough the track is, Matt DiBenedetto cites how bumpy Turns 3 and 4 are, but said in a media release that traversing the “back straightaway is like going over jumps.”

But just like with the old surface at Atlanta Motor Speedway, there are those who never want to see Auto Club’s surface actually improve.

“I did an appearance at Auto Club Speedway not too long ago and I told the track officials, ‘Whatever you do, don’t repave it!'” Austin Dillon said in a media release. “Or, wait to repave it until you can figure out how to make an asphalt that is very similar to what is on the track now.”

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