The Grand Prix of Boston has filed for Chapter 7 bankruptcy. The Grand Prix was scheduled to debut as an IndyCar Series race on September 4, 2016 and was to run each year through 2020. The race would run along the South Boston Seaport, and the city of Boston and the Massachusetts Convention Center Authority, among others, had reached an agreement with IndyCar to put on the race. However, in April 2016 the organizers of the race announced that it would not go forward as planned. They cited potential costs to correct flood zone issues as a reason for cancelling the race, but other sources cite low ticket sales and unhappy local residents as reasons for the cancellation.
Grand Prix of Boston Breach of Contract
In May of this year, it was announced that IndyCar was suing the organizers of the Grand Prix of Boston for breach of contract. The Grand Prix of Boston, as well as its CEOs John Casey and Mark Perrone, were listed as defendants. Additionally, the Grand Prix of Boston is being sued by engineering firm Howard/Stien-Hudson Associates, Inc. , who claims to be owed $466,096, and by sponsor Global Partners LP. Beyond these already filed civil suits, Attorney General of Massachutsetts, Maura Healey, has launched an intensive investigation of the failed race, trying to find out what happened to the millions of dollars in ticket proceeds and sponsor fees.
Grand Prix Bankruptcy
In early July 2016, the Grand Prix filed for bankruptcy, claiming close to $9 million in liabilities. Included among the liabilities are $1.67million it owes to ticket holders of the proposed race. The Grand Prix listed as assets $10,900 in cash along with two cars worth $50,000. Additionally, the company declared around half a million dollars in fees that it paid and are trying to recoup as assets.
The bankruptcy petition includes more than 4000 names of ticket holders who bought tickets to the event and have not been refunded. In addition, the list of creditors includes corporate sponsors Bridgestone Tire, LogMeIn, and MillerCoors. The Chapter 7 bankruptcy will allow the liquidation of assets to pay the creditors. Unfortunately, from the filing it appears as though there might not be many assets to distribute, and the ticket holders will likely have a hard time trying to get their money refunded.
Kathryn Davis is an attorney at the Bond & Botes Law Offices in Huntsville and Decatur, Alabama. She holds a Bachelor of Arts from Auburn University, and a Juris Doctorate from Samford University, Cumberland School of Law. She is passionate about utilizing the bankruptcy process to help clients navigate through what is usually some of the lowest points in their lives. Read her full bio here.