U.S. Formula 1 Hits a Speed Bump
AUSTIN (CN) - The problem-plagued return of Formula 1 auto racing to the United States has hit another speed bump, as the founder and former promoter of the race sued his former project partners, claiming they froze him out of the project.
Tavo Hellmund and Full Throttle Productions sued six LLCs and four people,
Robert Epstein, Irv Kessler, Kurt Rechner and Rad Weaver, in Travis County Court. All the defendants are involved in the coming November's inaugural United States Grand Prix at the Circuit of the Americas, under construction in Travis County.
Hellmund claims in his complaint that he spent 7 years doing the footwork: designing the track and support facilities and securing the rights to host Formula 1, MotoGP and Australian V8 Supercars races in Texas, but he lacked the funding.
He claims that It says "financial moguls" Epstein and Billy Joe "Red" McCombs were given a 75 percent interest in the project in exchange for providing capital to build and operate the track.
Hellmund says that within months, his partners froze him out of the company and ignored his suggestions, though he was the only partner with motorsports experience. He claimed they failed to pay his salary and failed to provided the promised financial resources for the construction of the track.
McCombs is not named individually as his defendant, but his company Mccombs Motor Sports LLC is a defendant.
"By withholding the promised funding and information necessary for Hellmund to build the Circuit, Hellmund's partners executed an improper and unlawful takeover of the very project he conceived, and very well may have it careening toward a wall," the complaint states.
Hellmund claims the defendants' failure to timely provide $190 million in funding by March 2011 prevented him from assigning Formula 1 contracts. He claims a subsequent failure to provide him $4 million resulted in F1's sanctioning fee for the inaugural race not being paid. He says he had to plead with F1 promoter Bernie Ecclestone not to kill the race, and to move the race date from June to November to give him more time to pay the sanctioning fee and secure financing for track construction.
Seeing his partnership and dream "in shambles," Hellmund says, he gave in to Epstein and McCombs' offer to buy his 20 percent interest in the project for $18 million, resign as manager and assign them the F1 contracts. But he says they breached the agreement when they failed to satisfy several pre-closing requirements, including paying his salary and more than $3.43 million in service extension payments, and he says they tried to "backdoor"-renegotiate the contracts with Ecclestone before their assignment.
The complaint claims that several comments made by Ecclestone and members of the media regarding the well-publicized difficulties of the project indicate that Hellmund is not to blame, that the investors are.
Hellmund seeks damages for breach of contract and a declaration that his removal as manager was unlawful. He also wants to see the books and records of Accelerator Holdings LLC, the project's holding company.
First held in 1908 in Savannah, Ga., the U.S. Grand Prix was last held in 2007 on the infield road course at the Indianapolis Motor Speedway. When completed, the Circuit of the Americas will be the only purpose-built Formula 1 track in the United States.
Hellmund and his production company, Full Throttle Productions, are represented by Austin Tighe, with Feazell Tighe, of Austin.