DECEMBER 17, 2003
CART files for bankruptcy protection
As expected Championship Auto Racing Teams has filed for Chapter 11 bankruptcy. This will enable Open Wheel Racing Series to buy certain assets from the court. The assets are expected to raise $3m. It is not clear whether the CART shareholders are going to get any money although it is expected that there may be $5-10m left when all the liabilities are settled and this will then be divided among stockholders although it will be a fraction of what they invested in the company. The aim is for the new series to be rebranded as the Champ Car World Series and many of the current employees will stay on, headed by chief operating officer David Clare, chief financial officer Tom Carter, vice president of racing operations John Lopes and director of technology Lee Dykstra.
There may be complications if there is another bidder for the assets which is quite probable as some of the shareholders are unhappy at what has happened and may try to take over the series themselves.
The biggest issue is not who owns the series but rather whether or not there will be enough cars to keep the contracts with promoters alive.
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