Former Kentucky Speedway owners say price tag to SMI was 'fire sale'
Court papers filed by the former owners of Kentucky Speedway say they had to accept less than market value when they sold the track to Speedway Motorsport’s Inc. because the facility doesn’t have a NASCAR Sprint Cup race date.
When Kentucky Speedway co-founder Jerry Carroll announced last May that he had agreed to sell the track to SMI, he said the ownership group did not recoup its $152 million investment. According to a legal filing earlier this week, Carroll hopes to recoup it by winning a federal antitrust lawsuit against NASCAR and sister company International Speedway Corp.
Carroll’s group sold the 1.5-mile track in Sparta, Ky., for $78.3 million – the assumption of $63.3 million in debt, $7.5 million in cash and another $7.5 million upon the satisfaction of certain conditions. According to an ISC filing last year, ISC rejected an offer to purchase the track for $186 million.
The brief says Carroll’s group “sold the track to SMI for below market value. This sale to a co-conspirator at firesale prices – a consequence consistent with Defendants’ past behavior, … in no way moots this lawsuit.
“KYS specifically retained rights to this lawsuit in the sale, and it still has a claim for past damages and/or the difference in sale price due to the illegal conduct. Moreover, part of the sale price is contingent on whether KYS obtains a [Cup] race in the future.”
As part of the sale, Carroll’s group retained the right to continue its lawsuit alleging that Kentucky Speedway did not get a Sprint Cup race because of a conspiracy by the France-owned sanctioning body NASCAR and the publicly traded ISC, whose majority of voting stock is owned by the France family. ISC tracks have 19 of the 36 point-paying Sprint Cup races. SMI, which has 12 Cup races, is also listed as a co-conspirator in the case.
A U.S. District Court judge ruled last year that there was not enough evidence for the case to go to trial, and Kentucky Speedway’s former owners are appealing that decision.
Much of the Kentucky Speedway brief filed Tuesday argues that the track is not a jilted distributor, that its expert testimony in the case is valid and that “with a truly competitive market, KYS would receive a race on its own merit without any court intervention.”
Final briefs in the case are due at the end of the month. There likely will be a hearing scheduled, and then it typically takes at least a couple of months for the appeals court to make a decision.
If Kentucky Speedway wins the appeal, the case would be scheduled for trial. If the appeals court affirms the NASCAR decision, the only appeal left for the track founders would be to try to get the case heard by the U.S. Supreme Court.
SMI Chairman Bruton Smith has said he wants to realign a Cup date from one of his existing tracks to Kentucky.
But NASCAR spokesman Ramsey Poston reiterated Thursday that as long as the case is unresolved, NASCAR would not consider any realignment request from SMI to move a Cup race to Kentucky.
NASCAR has run its Truck series at the track since it opened in 2000 and what is now called the Nationwide Series there since 2001.
