Rick Ware Racing halted from selling racing agreements for 10 days

CHARLOTTE, N.C. (CN) — Rick Ware Racing cannot close a deal selling its charters or company for 10 days, a Charlotte judge ordered Thursday, in its legal case with Legacy Motor Club.

Legacy and Rick Ware Racing are locked in a dispute over which charter was sold—#36 or #27—both of which are now tied to a pending sale to T.J. Puchyr, co-founder of Spire Motorsports.

Legacy requested a preliminary injunction and temporary restraining order, claiming Rick Ware Racing “has shown a willingness to lie to Legacy and to the Court about the status of the deal,” after it emerged that Rick Ware Racing agreed to sell its company to Puchyr. Puchyr had helped negotiate the charter sale between the two teams. Rick Ware Racing had previously informed the court that it had no intention of selling or otherwise transferring the charters while the lawsuit was pending.

On Thursday, Mecklenburg Superior Court Judge Clifton Smith issued a verbal order entering a temporary restraining order, blocking the sale for 10 days. The court will consider Legacy’s request for a preliminary injunction during that period; if granted, Legacy could prevent the sale from being finalized while the case is pending.

Legacy is required to post a bond of $5 million by Friday at 5 p.m. as a condition of the restraining order. Counsel for Rick Ware Racing had requested that the court set the bond amount at $150 million, the value of the deal between Puchyr and Rick Ware.

“There’s a binding contract already,” Mark Henriques, counsel for Rick Ware Racing, said. “There is nothing for your honor to enjoin even if you were to find that they have some likelihood of success on some claim.”

The sale, Legacy says, risks the racing agreement it bought, because Puchyr has not been open to letting Legacy race under one of the agreements.

Rick Ware Racing assured Legacy and the court that Charter 36 would be available in 2027, Keith Forst, counsel for Legacy, told the judge, even if Legacy believed that the sale was for Charter 27. The defendant is therefore judicially estopped from backtracking on its previous claims, he said.

“What we know is that these promises were made and this backdoor transaction was apparently entered into and is apparently a binding agreement, although not yet closed,” Forst stated. He called Legacy’s request for relief “modest” and the “prudent” thing to do.

“There is really no harm to defendant whatsoever, and there is tremendous harm to plaintiff Legacy if this closing of these assets in fact happens,” Forst said.

“My clients did exactly what they had the freedom to do, work out a deal that meets the needs of the entity, and enter into a binding transaction that covers the entire business and yet keeps Cody (Ware) racing,” Henriques stated.

“They’re trying to have their cake and eat it too since they lost the first preliminary injunction,” he said.

Just because counsel said in a prior hearing that Legacy could wait two years and potentially get Charter 36 does not mean that the company would never sell or encumber it, Henriques said.

Legacy sued Rick Ware Racing in April, alleging it backed out of a signed charter sale agreement. Rick Ware responded with counterclaims, accusing Legacy of attempting to secure a different racing contract than the one agreed upon.

In court filings, Rick Ware Racing insisted it would never have sold Charter 27, as doing so would have left the team unable to race, and owner Rick Ware had no intention of selling the business. While both sides dispute which charter was sold, they agree a valid contract exists for the sale of one.

“Defendant Rick Ware Racing, LLC’s representations to this Court cannot be trusted,” Legacy said in its request for a preliminary injunction and temporary restraining order. “Having once opposed a preliminary injunction by representing that it would not divest the NASCAR Charters at issue in this case, RWR turned around and immediately signed a purported deal to do just that.”

Legacy wants the deal to remain unclosed until the case is resolved. Trial is currently scheduled for January.

Rick Ware Racing opposed Legacy’s latest motion and asked for a different judge, arguing the request is “effectively a motion for reconsideration” of Smith’s earlier denial of a restraining order and injunction. The previous hearing was led by Superior Court Judge Daniel Kuehnert, who warned Rick Ware’s counsel of “really serious ramifications” if the company sells its two charter agreements after having told the court it had no plan to do so. Rick Ware Racing has since changed legal teams.

According to Forst, Rick Ware Racing filed its countersuit—claiming no intent to sell—after being approached by Puchyr with a letter of intent. He added the deal was meant to bring Legacy to the table to revisit the purchase price of the charter.

Legacy has also sued Puchyr, alleging he intentionally induced Rick Ware Racing to breach their contract and interfered with its business relationships. Legacy said Puchyr, through a prior consulting deal, had access to confidential information he later used to gain a competitive edge.

A hearing for the preliminary injunction request has not yet been scheduled.

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