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BK Racing to be sold Aug. 20; Ron Devine plans to bid for team

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CHARLOTTE, N.C. — BK Racing owner Ron Devine said during a bankruptcy court hearing Thursday that he plans to make a bid to reclaim his NASCAR Cup team.

A bankruptcy judge approved a plan for BK Racing to be sold Aug. 20 (with bids due Aug. 13). A hearing is scheduled Aug. 21 so the court can approve the winning bidder.

There is a bid for $1.8 million for the team from Mike Beam, president of GMS Racing. Bids will start from there for BK Racing. Joining Beam in court Thursday as an observer was GMS Xfinity driver Spencer Gallagher.

Devine put BK Racing in Chapter 11 bankruptcy on Feb. 15. He said a day later that he made the move to prevent Union Bank and Trust, which claims it is owned more $9 million, from taking over the team and selling the charter. The IRS also claims it is owed money, along with several other groups and individuals.

A trustee was approved by the court to oversee the team, removing Devine from power, on March 28. The trustee has since determined that selling the team is the best route.

Trustee Matthew Smith defended his reasoning for selling the team on Tuesday by telling the court: “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. So I believe the right owner, transition of ownership, would be the best thing for this team.”

Smith provided testimony on Tuesday that “the cash flow (for the team) is exceptionally tight.”

He also said on the stand: “My current cash forecast … does show sufficient cash if I needed to go to the end of the season. I do not have the ability to run much past the end of the season.”

Smith said in court that since news of the plan to be sold, he has heard from 29 parties interested in BK Racing.

In court Thursday, Devine blamed the bank for the move to sell the team next month.

“It’s a fire drill …. driven by the bank,” Devine said.

BK Racing debuted in Cup in 2012. Among those who have driven for the team are Landon Cassill, Alex Bowman, Ryan Truex, Matt DiBenedetto, David Ragan, Corey LaJoie and Gray Gaulding.

The organization has three career top-10 finishes. The organization is running only the No. 23 car this season. That car ranks 34th among the 36 charter teams in owner points.

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Bid of $1.8 million submitted for BK Racing

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A bid of $1.8 million has been made for BK Racing, the trustee operating the team stated in court documents.

Trustee Matthew Smith stated in federal court documents that the $1.8 million bid is a stalking horse bid. That means that the bid sets the lowest price the team can be sold.

Should the stalking horse bid be the winning bid, $350,000 of the price will go to payment of priority wage claims.

The bid is from MRB LLC.

ESPN.com reported that Mike Beam, president of GMS Racing, has made the bid on the team. Beam told ESPN.com that if he becomes the owner of the team, it would be an affiliate of GMS Racing, which has previously considered moving to Cup.

Court documents state: “The Trustee believes that the Stalking Horse Bid will compel potential purchasers to come forward and otherwise generate additional interest in the Race Team Assets reasonably likely to facilitate an effective competitive sale of such assets.”

Smith stated in court documents that he has communicated with more than 25 separate parties interested in acquiring the team’s assets.

Court documents state that any qualified bidder must propose a bid at least $300,000 more than the original bid of $1.8 million.

A sale is scheduled for 9:30 a.m. ET on Aug. 20. A court hearing is set for Aug. 21 for the approval of the sale. The winner has three days after the court order approving the sale to complete the purchase.

A hearing is set for Tuesday on approving those sale procedures.

Also, in another court filing, Smith stated that he’s agreed to sell team assists to Obaika Racing for $265,000. Smith said in court documents the assets were valued at $382,000.

Among the items listed in the offer is a tractor trailer transporter, seven bare chassis and 12 other chassis in various forms of construction. Also on the list are two crash carts, pit road tool box and pit suite, pit tool cart and two golf carts.

BK Racing owner Ron Devine put the team in chapter 11 bankruptcy on Feb. 15 in an effort to retain his team. Union Bank & Trust claims that it is owed $9.475 million. Smith was approved as the trustee on March 28, relieving Devine of his owner duties. Others claiming to be owed money include the Internal Revenue Service.

Blake Jones is driving BK Racing’s No. 23 car this weekend at New Hampshire Motor Speedway. This will be Jones’ first Cup start. He qualified last in the 37-car field.

Judge tells BK Racing owner that trustee is in charge of team

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CHARLOTTE, N.C. — The judge overseeing BK Racing’s bankruptcy case reminded team owner Ron Devine that he has no management role at this time and that a court-approved trustee is in charge of the team.

The comments came during a status hearing Tuesday in federal court.

BK Racing filed Chapter 11 bankruptcy Feb. 15. Devine said Feb. 16 the bankruptcy filing was made to keep Union Bank & Trust from potentially getting the team’s charter. The bank claims that BK Racing owes it more than $8 million.

A trustee was assigned to the team March 28.

Devine asked the court for access to a camera system in the race shop that he can monitor on a mobile device to show potential investors or sponsors what takes place there and better understand the sport.

The attorney for trustee Matthew Smith noted that Devine has met potential sponsors and investors, creating a question of who is in charge of the team.

Devine said in court: “It’s new to me our relationship has deteriorated. … I’ve tried not to be disruptive. … I’ve taken a lesser role. Even at the Dover race I didn’t wear a headset.’’

Judge J. Craig Whitley told Devine: “Bottom line, the trustee is running the race team.’’

The judge told Devine that he had no management rights and if that was unclear from before, he apologized.

Also in court Tuesday, the trustee presented a budget through June 24 for the team. No details were revealed in court. 

BK Racing, which has Gray Gaulding as driver, is 35th in owner standings. Gaulding is coming off a 30th-place finish at Dover. His best finish this season is 20th in the Daytona 500 and at Texas Motor Speedway. His average finish this season is 30.1.

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