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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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Will chaos (and rain) reign on Daytona road course?

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The biggest unknown for Sunday’s inaugural Cup race on the Daytona road course?

Ryan Newman says “there are so many unknowns that it would be fabricating for me to tell you if I knew what the biggest unknown was.”

But with all the uncertainties heading into the race (3 p.m. ET on NBC) on a new course for Cup teams — and no practice — Newman is counting on one near certainty.

“I hope it rains,” he said. “I hope you add in the extra that we have to bolt on rain tires and we get something that is just spectacular. I hope that. The reality is that could be the biggest unknown that we have. We’re in Central Florida in the middle of August when it pretty much rains every day. We’ll see. I don’t know. I look forward to it.”

Good chance he gets his wish.

The wunderground.com forecast for Sunday calls for scattered thunderstorms throughout the afternoon. The green flag is scheduled to wave at 3:24 p.m. ET. There is a 58% chance of scattered thunderstorms at that time.

Will rain tires be needed for Sunday’s Cup race on the Daytona road course? They’ll be available. (Photo by Sarah Crabill/Getty Images)

Goodyear will bring rain tires for the weekend and teams will run in the rain, provided it is not a downpour and there is not lightning within an 8-mile radius of the track. Cup teams have never run a race on rain tires.

Only three times in Cup history have rain tires been employed. Dale Earnhardt and Mark Martin used them in a test in 1995 at Watkins Glen. Teams practiced and qualified on rain tires at Suzuka in 1997 for the exhibition race in Japan. Rain tires were last used in Cup for a practice session at Watkins Glen in 2000.

Rain or shine, the task of racing on a new course without practice will be challenging enough for competitors.

“On a scale of 1 to 10, 10 being difficult, this is a 10,” Kurt Busch told NBC Sports.

“I’m excited for the challenge, the uniqueness of it all, how it’s just crazy, basically.”

MORE: Starting lineup for Sunday’s Cup race

Said Chase Elliott, who won last year’s race on the Charlotte Motor Speedway Roval after crashing: I’ve never entered a race where you literally just have no idea what to expect.

Patience will be key. But not all 39 drivers will practice that equally when the green flag waves.

“I’ve got laps around that track without the extra chicane but that doesn’t mean I won’t haul off into Turn 1 and blow through the grass,” Newman said. “You don’t know. It will be more patience than aggressiveness I promise you by pretty much everyone. Those that don’t, you’ll notice.”

Kevin Harvick, who swept the Cup races at Michigan last weekend, will lead the field into Turn 1 and he’s not sure what to expect.

“I think me leading everybody into Turn 1 at Daytona could be interesting because I have no freaking clue where I’m going as we go down there,” he said. “Most everybody in the field is the same way.”

Turn 1 on the Daytona road course is a left-hand turn off the frontstretch just past pit exit. That begins the six-turn infield portion of the 3.61-mile course before cars return to the oval in what is its Turn 1. 

Teams stay on the oval through the backstretch before turning into the chicane there and going back on to the oval. A chicane was added off what is Turn 4 on the oval to help slow the cars before returning to the infield portion of the course. That was done for fear that the high speeds would wear the brakes over the race.

“I think it’s going to take everybody a little bit of time,” Matt Kenseth told NBC Sports. “I think there are going to be some people who have raced road courses a lot that probably feel more confident than others and possibly be overzealous and just charging it hard right away, and there’s probably going to be other people who are careful and see how many people slide into things. … It should be really interesting. If I was a fan, I’d be all about not having practice.”

Here are Cup drivers entered for Sunday’s race who have competed on the Daytona road course (overall finish)

Clint Bowyer 2013 Rolex 24 (finished 16th)

Kurt Busch — 2005 Rolex 24 (27th), 2008 Rolex 24 (3rd)

Kyle Busch — 2009 Brumos Porsche 250 (10th), 2020 Rolex 24 (26th),

Cole Custer — 2018 IMSA Michelin Pilot Challenge (3rd), 2019 IMSA Michelin Pilot Challenge (9th)

James Davison — 2014 Rolex 24 (48th), 2015 Rolex 24 (29th), 2016 Rolex 24 (44th), 

Kevin Harvick — 2002 Rolex 24 (69th)

Timmy Hill — 2012 Rolex 24 (51st)

Jimmie Johnson — 2004 Rolex 24 (28th), 2005 Rolex 24 (2nd), 2007 Rolex 24 (36th), 2008 Rolex 24  (2nd), 2009 Rolex 24 (7th), 2010 Rolex 24 (21st), 2011 Rolex 24 (15th)

Matt Kenseth — 2005 Rolex 24 (27th), 2006 IROC race (10th)

Michael McDowell — 2005 Rolex 24 (42nd), 2007 Rolex 24 (10th), 2008 Rolex 24 (15th), 2011 Rolex 24 (7th), 2012 Rolex 24 (3rd)

Ryan Newman — 2006 IROC race (3rd)

Martin Truex Jr. — 2006 IROC race (6th)

Hailie Deegan: Road courses are ‘one of my stronger suits’

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Many drivers will be navigating the Daytona road course for the first time this weekend.

Hailie Deegan is not one of them.

Deegan, who competes in the ARCA Menards Series, will be in the field when the series takes to the 14-turn, 3.61-mile circuit for practice and a race Friday evening (5 p.m. ET on Trackpass).

“I’m pretty excited because this was not one of the races we had planned on our schedule,” Deegan told NBCSN’s Kelli Stavast earlier this week. “At the beginning of the year I saw all the races, obviously to see which ones you’re looking forward to, like your favorites and stuff and obviously this on wasn’t on there.  … I like road courses. I raced at Sonoma about twice (in ARCA Menards West). I was decent there, I qualified on the pole one of the times (2019) there against a lot of good drivers. It was a confirmation that, ‘Ok, we’re decent at road courses.'”

Deegan, who enters the race fourth in the point standings behind Michael Self, first got a shot at the road course at the beginning of the year. As a Ford development driver, she took part in multiple days of testing before competing in a Michelin Pilot Challenge race in a GT4 Mustang.

“I would not say I’m perfect at road courses,” Deegan said. “But I feel that’s one of my stronger suits. I’m trying to learn this whole stock car world. Circle track, everything like that, that’s all been a foreign concept. So everything I’m learning I’m learning for the first time. But when we go back to road courses, I grew up in go karting, I grew up racing off-road trucks on courses where you turn right and left. So that’s not a foreign concept to me. So I feel more comfortable on road courses, especially with us only getting an hour of practice and all the time I have on that track.

“I have so many days of practice from the beginning of the year on that track. Obviously, it’s a different car, a GT4 Mustang.  … It’s easy to drive, but hard to be fast in an IMSA car. (While) the stock cars are harder to drive, but you have that experience, I feel like you can have a little bit of an advantage over people.”

With eight races left in the season, Deegan will try to take that advantage to victory lane for his first career ARCA win. The last time she visited Daytona in February, she finished second in the season opener to Self.

NASCAR’s weekend schedule for Daytona road course

Daytona road course
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For the first time this weekend, NASCAR will compete on the Daytona road course.

All three of NASCAR’s national series and the ARCA Menards Series will take to the 14-turn, 3.61-mile circuit, culminating in Sunday’s Cup Series race.

This weekend takes the place of the race at Watkins Glen International for Cup and Xfinity.

Kevin Harvick will start on the pole for Sunday’s Cup race. Austin Cindric will lead the Xfinity field to green on Saturday.

Here is the weekend schedule for the Daytona road course.

(All times Eastern)

Thursday, Aug. 13

10:30 a.m. – ARCA driver-spotter-crew chief meeting (electronic communication)

11 – 11:30 a.m. – ARCA rookie meeting (teleconference)

11:30 a.m. – Noon – ARCA crew chief meeting (teleconference)

3 – 4 p.m. – ARCA haulers enter (screening in progress)

5:30 – 7:30 p.m. – Driver motorhome parking (screening in progress)

 

Friday, Aug. 14

9 a.m. – ARCA garage opens

9 a.m. – 4 p.m. – ARCA garage access screening in progress

2 – 3 p.m. – ARCA practice

3:30 p.m. – Xfinity rookie meeting (electronic communication)

4 p.m. – Xfinity driver-crew chief meeting (electronic communication)

4:50 p.m. – ARCA drivers report to their cars

5 p.m. – ARCA race; 28 laps/101.08 miles miles (MAVTV, Motor Racing Network)

6 p.m. – Truck Series driver-crew chief meeting (electronic communication)

7:30 p.m. – ARCA haulers exit

 

Saturday, Aug. 15

6 – 8:30 a.m. – Xfinity haulers enter (screening and equipment upload)

8:30 a.m. – Xfinity garage opens

8:30 a.m. – 2 p.m. – Garage screening in progress

2 – 4 p.m. – Truck Series haulers enter (screening in progress and equipment unload)

2:50 p.m. – Xfinity drivers report to cars

3 p.m. – Xfinity race; 52 laps/187.72 miles (NBCSN, Motor Racing Network, SiriusXM NASCAR Radio)

4 – 7 p.m. – Truck Series garage access screening in progress

4 – 8 p.m. – Truck Series garage open

4:30 – 5 p.m. – Truck Series rookie meeting (teleconference)

4:30 p.m. – Cup rookie meeting (electronic communication)

5 p.m. – Cup driver-crew chief meeting (electronic communication)

5:30 p.m. – Xfinity haulers exit

 

Sunday, Aug. 16

6 – 8 a.m. – Cup haulers enter (screening in progress and equipment unload)

8 a.m. – Cup garage opens

8 a.m. – 2 p.m.  – Cup garage access screening in progress

9 a.m. – Truck Series garage opens

9 – 11 a.m. – Truck Series garage access screening in progress

11:40 a.m. – Truck Series drivers report to vehicles

Noon – Truck Series race; 44 laps/158.85 miles (FS1, MRN, SiriusXM NASCAR Radio)

2:30 p.m. – Truck Series haulers exit

2:50 p.m. – Cup drivers report to cars

3 p.m. – Cup race; 65 laps/234.65 miles (NBC, MRN, SiriusXM NASCAR Radio)

6:30 p.m. – Cup haulers exit

NASCAR updates its COVID-19 guidelines

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NASCAR issued an update to teams to the sanctioning body’s COVID-19 guidelines this week.

If after 10 days, a NASCAR member is unable to produce two negative PCR tests, their return status may be medically reviewed by a NASCAR Consulting physician. Previously, a NASCAR member needed to have two negative tests more than 24 hours apart and a note from their physician to be cleared to compete.

MORE: Spencer Davis cleared to race after COVID-19 recovery

Truck Series driver Spencer Davis is the third driver to be cleared to resume racing after a positive test. He missed last week’s race at Michigan. Jimmie Johnson missed the Indianapolis race in July after a positive test. Brendan Gaughan is racing this weekend for the first time since he tested positive for COVID-19 in July.

NASCAR cites new guidelines from the Centers for Disease Control and Prevention with updating the sport’s COVID-19 guidelines.

“As we’ve said since our return, NASCAR’s health and safety plans will continue to evolve, with the goal remaining the same – a safe event for both our competitors and the communities in which we race,” said John Bobo, NASCAR vice president, racing operations, in a statement. “NASCAR will continue to implement and execute a comprehensive plan to ensure the health and safety of our competitors and the surrounding communities.”

Here are NASCAR’s updated COVID-19 guidelines:

Confirmed Positive Cases – Symptomatic and Asymptomatic Cases. Confirmed positive cases may return to racing activities after they have received two negative test results taken at least 24 hours apart.

A. If after 10 days, a NASCAR Member is unable to produce two negative PCR tests, their return status may be medically reviewed by a NASCAR Consulting physician.

  • New CDC guidance of July 22, 2020, recommends discontinuing PCR testing after the conclusion of the 10-day isolation period for the onset symptoms for the initial COVID-19 infection, if a person is fever-free for a minimum of 24 hours without the use of medication.
  • Please note: Based on advice from consulting physicians, NASCAR counts the 10 days from the date of the first positive PCR test for COVID-19.
  • In its guidance, CDC research indicates that in no instances yet discovered has there been a case where the virus is able to self-replicate beyond the 10th day following a positive test among individuals who are not immunosuppressed and did not have severe disease (e.g. requiring ICU stay or ventilation), so an individual in this situation poses no harm to others.  In the event that the individual continues to be tested, it is very likely that the individual will continue to return positive results.
  • Based on this new CDC guidance, NASCAR consulting physicians would review the individual’s situation and determine if they appropriately fit the CDC requirements before being allowed to return to racing without two negative PCR tests.

B. They must also have written clearance from their personal physician to resume all racing activity.

Confirmed exposure to a positive COVID-19 person. Those exposed individuals are required to stand-down from competition and self-isolate. They may return to racing activities after they have received one negative test. NASCAR in its discretion may request a second test for clearance based on the nature of the exposure. Please note: a confirmed exposure is based on a totality of the circumstances as determined by NASCAR in consultation with their consulting physicians. Analysis will include: identifying people exposed over the last 10 days, accumulated time greater than 10 minutes, direct skin contact (shaking hands, etc.), lack of social distancing and the level of PPE use among the individuals involved in the contact.