AG looks into Boston IndyCar non-refunds (8th Update)
| IndyCar's name is now mud in Boston. The bankrupt event still owes IndyCar its $4.2 million sanction fee, money they will never see |
Boston Grand Prix, the local company besieged by lawsuits since its plans for an IndyCar race collapsed in April, filed for bankruptcy on Tuesday, claiming almost $9 million in liabilities, including $1.67 million owed to ticket holders who were never reimbursed.
The remaining assets of the company total a paltry $10,900 in cash and two cars worth $50,000, according to the bankruptcy filing.
The company also declared among its assets $586,000 in fees it paid out and is trying to recoup. The fees went to the Massachusetts Convention Center Authority and to the national body that governs IndyCar.
"While BGP has taken this action because it has no other choice, it is still an action that is taken with deep regret," the company said.
The bankruptcy filing lists about 90 pages of ticket buyers, most of whom had not been refunded. It includes more than 4,000 names. Buyers with more than one transaction appear to be listed multiple times
Bankruptcy lawyer Mark Powers of Bowditch & Dewey, a specialist contacted by the Globe, said the ratio of assets and liabilities are bad news for ticket holders still awaiting refunds.
"Based on the numbers, unfortunately, it looks like ticket buyers will have a hard time getting their money back," Powers said.
Boston Grand Prix has been under investigation by Attorney General Maura Healey's office over money still owed to people who have not been reimbursed for their tickets, some of which cost up to $205 each, according to figures the Grand Prix released in March.
Healey has threatened to sue to recover ticket money and last week formally notified Boston Grand Prix, the company's manager, John Casey, and the national IndyCar governing body that they may face litigation.
"Boston Grand Prix's bankruptcy filing today does nothing to prevent us from our continued efforts to find out where the money ticket holders spent has gone and to aggressively pursue a refund for those consumers," Healey's office said Tuesday evening in a statement. "We will continue to seek information from all parties involved and take whatever action is necessary to get the money back for those who purchased tickets."
Boston Grand Prix has said it ran out of money after returning about $400,000 in refunds. It has repeatedly insisted it needs an influx of cash to complete the reimbursements.
"It has become clear that a full refund will not be possible without the cooperation of third parties, including IndyCar and others who have been unwilling to participate," Boston Grand Prix stated Tuesday. "BGP hopes that the present [bankruptcy] filing may provide a forum for an orderly disposition and administration of claims to provide as full a return as possible to the ticket holders and all other impacted parties.
Boston Grand Prix announced it had filed for Chapter 7 bankruptcy, which provides for the liquidation of assets to pay creditors.
The list of corporate creditors includes former sponsors of the race, such as Bridgestone Americas Tire Operations, owed $223,500; Jennings Road Management Corp., owed $100,000; LogMeIn, Inc., a prominent sponsor that was in for $390,000; and MillerCoors, owed $105,000, according to the filings.
Another sponsor, Global Partners LP, has sued Boston Grand Prix in Essex Superior Court. The bankruptcy filing says Global is owed $275,000. Billionaire car dealer Herb Chambers has threatened to sue over the $100,000 he paid in sponsorship money.
The company's business debts include $45,000 to Delta Airlines, $4.2 million to the national IndyCar body, $74,640 to Party by Design of Avon, and $35,947 to the law firm of Rubin & Rudman.
The Boston engineering firm Howard/Stein-Hudson Associates Inc. filed suit against Boston Grand Prix, claiming to be owed $446,096. Boston Grand Prix's bankruptcy filing lists a slightly lower amount.
Boston Grand Prix is also being sued by IndyCar and MassPort.
The Grand Prix lists a possible counterclaim against Howard/Stein-Hudson as a potential asset, as well as a claim for tortious interference against IndyCar.
Within the last year, according to the bankruptcy filing, Boston Grand Prix paid $423,000 in "salary and consulting" fees to Casey Summit LLC, a company managed by John Casey; $130,624 to Mark Perrone, the former chief executive of the Boston race; $166,000 in "compensation for consulting services" to NZR Consulting Inc., an Indiana motorsport expert; and $123,000 to CK Strategies, the consulting firm run by Chris Keohan, a former campaign adviser for Mayor Martin J. Walsh.
Adam J. Ruttenberg, a bankruptcy expert with Posternak Blankstein & Lund, reviewed the filing Tuesday night and noted that creditors will meet with a court-appointed trustee in the case in August. The trustee's job is to turn the company's assets into cash and distribute it to the creditors in accordance with the law, he said.
Race organizers in 2015 signed a five-year deal with Walsh to hold the race in the Seaport District over Labor Day weekend. The race was planned for a 2.2-mile temporary street course around the Boston Convention & Exhibition Center.
Tickets went on sale in March, but the race was canceled in late April, amid finger-pointing between promoters and the city. Casey accused the city of making unreasonable demands. The city in return said the promoters were disorganized.
Cody Butler of Quincy bought tickets to the event and is still waiting for his money back. He is listed among the creditors, owed $570.
"It's terrible they were allowed to sell tickets in the first place," Butler said.
He believes the city and the sponsors who provided credibility to the race should "have some responsibility — anyone who allowed them to move forward." Mark Arsenault/Boston Globe
07/05/16
| Take a bow Boston. Take a bow. You bankrupted the promoter and now you will get nothing. |
As predicted by AR1.com, Boston Grand Prix, LLC filed for bankruptcy Tuesday while ticket-holders for the failed IndyCar race wait for refunds.
It is stated in the filing that the company owes nearly $9m to thousands of ticket- holders, sponsors and others. But its assets are less than $50,000.
In the meantime, Massachusetts Attorney General Maura Healey announced that actions would be taken to make sure ticket-holders get their money back.
"Boston Grand Prix's bankruptcy filing today does nothing to prevent us from our continued efforts to find out where the money ticket holders spent has gone and to aggressively pursue a refund for those consumers," reads a statement issued by Cyndi Roy, the AG's communications director. "We will continue to seek information from all parties involved and take whatever action is necessary to get the money back for those who purchased tickets."
The IndyCar race scheduled for the Labor Day weekend in Boston's Seaport District was cancelled in April, because the company could not come to an agreement with the city on a number of issues.
07/01/16
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| The shit is really hitting the fan in Boston now |
The defunct Grand Prix of Boston is “well short" of funds to refund ticket holders and plans to file for bankruptcy unless former vendors, staffers and consultants pitch in to pay the $1.7 million tab, according to a letter from the race promoter’s attorney.
The letter, obtained by the Herald, warns investors, vendors and others who worked on the canceled race they could be publicly identified and dragged into the bankruptcy case and a lawsuit from Attorney General Maura Healey unless they return their earnings to help reimburse ticket holders.
“This will mean significant exposure to many of you," the letter from Grand Prix attorney Michael J. Goldberg said.
The unusual plea from the Grand Prix comes as Healey took the first step toward filing a civil lawsuit against the promoters and IndyCar, sending them a five-day notice of possible legal action.
A Healey spokeswoman said the notice was sent out after the AG’s office rejected the plans submitted yesterday by local promoters and the national race organization to come up with the refunds.
“We were not satisfied by the plans," Healey spokeswoman Cyndi Roy Gonzalez said.
She wouldn’t elaborate, but sources confirmed the Grand Prix’s plan focused on getting vendors and others to return fees they earned before and just after the race fell apart in April. The national IndyCar organization could return part of a sanctioning fee paid by the Grand Prix, but that’s still well short of the $1.7 million Healey has determined ticket holders 
are owed.
In the letter to vendors, consultants and investors, Goldberg said the Grand Prix will “most likely" file for Chapter 7 bankruptcy, resulting in “an even more chaotic situation," if it can’t raise the funds to pay back ticket holders and avoid a lawsuit from the attorney general’s office.
“You can help make consumers whole and put this unfortunate episode in the rear view mirror," the letter said.
Goldberg blamed Boston Mayor Martin J. Walsh’s administration for the cancellation, saying the city refused to help promoters alter the IndyCar course in the Seaport District to avert a Conservation Commission decision that doomed the race. The ruling forced the promoters to get state environmental approval because part of the course went through a flood plain.
The Grand Prix attorney also slammed IndyCar, claiming the group “terminated our sanctioning agreement" during negotiations to save the race.
The letter is the latest turn in the Grand Prix fiasco, which has been a major embarrassment for Walsh and other state agencies that were working with promoters to hold the high-speed race on city and state roadways.
The Herald reported yesterday that Massport has taken legal action against the Grand Prix, the first government agency to go after the race promoters. Massport got stuck with 2,000 massive concrete barriers it was temporarily storing for the Grand Prix on a prime waterfront parcel. The promoters have ignored requests to remove the barriers and Massport filed a civil lawsuit in Suffolk Superior Court asking a judge to order the Grand Prix to take them back. Joe Battenfeld/Boston Herald
06/29/16 As AR1.com predicted below, For the first time, the word 'bankruptcy' is being used as ticket holders wait for their money from organizers for the failed Boston IndyCar race.
A letter that was obtained by WCVBTV 5 Investigates Wednesday was sent out last week by the attorney for Boston Grand Prix, and asks vendors and others to give money to a fund to repay ticket holders for the canceled race.
Those ticket holders are out an estimated $1.7 million.
In the letter, Boston Grand Prix attorney, Michael Goldberg, said he is calling for contributions from investors, vendors, consultants and others to help pay back ticket holders.
He said they have already paid back $400,000 and need at least another $1,677,894.78 to make ticket holders whole. He said if they can't get the money, it's likely Boston Grand Prix will file for bankruptcy, which could mean significant losses for people involved.
Goldberg said that it needs to be emphasized that "these problems were not created by Boston Grand Prix, but by a city that put up too many hurdles, and IndyCar, who canceled the race."
Attorney General Maura Healey is not happy with what she's heard from Boston Grand Prix and IndyCar, and took the first steps late Tuesday to file a civil lawsuit to protect consumers. wcvbTV
06/29/16
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| Attorney General Maura Healey |
Attorney General Maura Healey is threatening to sue parties connected to a failed IndyCar race in the Seaport District, formally notifying them that she may go to court to collect money still owed to ticket buyers, a Healey spokeswoman said Tuesday according to Mark Arsenault of the Boston Globe.
The attorney general has sent legally required notices of her actions to the local company that proposed the race, Boston Grand Prix, the company's manager, John Casey, and the national IndyCar body that governs the sport, according to Healey's office. The attorney general is required to notify the parties five days before filing litigation.
Healey's move to initiate lawsuits comes after several weeks of investigation into the failed race, which included the issuance of subpoenas for documents, and a day after a deadline she imposed on the parties to produce a reasonable plan to repay ticket holders, or face litigation.
Plans for the race collapsed in April, and the aftermath has become a pile-up of lawsuits. The national IndyCar organization has already sued the Boston Grand Prix for breach of contract. A one-time race sponsor, Global Partners LP, sued Boston Grand Prix in Essex Superior Court, according to records.
And in a third case, the Boston engineering firm Howard/Stein-Hudson Associates Inc. filed suit against Boston Grand Prix in May, claiming to be owed $446,096, plus ongoing interest, for "thousands of man-hours" of work performed under contract.
The attorney general's office said Monday that it had received some documents before the deadline and was reviewing them. By Tuesday, Healey had concluded that the repayment plans were insufficient.
Boston Grand Prix has said it ran out of cash after giving back about $400,000 to ticket holders.
Michael J. Goldberg of Casner & Edwards, a Grand Prix lawyer and spokesman, said in a statement Monday that the company was working to develop a plan to repay ticket holders but needed an influx of money.
"We are now, and have been, in discussions with investors, sponsors, and other stakeholders to ascertain their willingness to contribute to a fund to help pay for refunds to ticket holders, and we have kept the AG's office fully informed of our efforts," Goldberg said. "We have also been providing numerous documents and information to the AG's office in accordance with their information requests. This is a time-consuming process, and, at present, BGP cannot know the timetable for raising any of the needed funds."
Neither Goldberg nor Casey could be reached Tuesday evening.
IndyCar, in a statement Tuesday, said its objective is to ensure ticket holders are made whole.
"As we've stated before, it is the Boston Grand Prix that is responsible for distributing the funds received from all ticket sales," said Stephen Starks, IndyCar vice president of promoter relations. "To this end, we are continuing our conversations with the relevant parties in Boston, including the attorney general's office, to reach a resolution to this concern."
ESPN reported in April that organizers had sold more than 20,000 tickets. General admission tickets were $99; reserved grandstand tickets were $150 to $205, according to figures released by the Grand Prix in March.
Boston Grand Prix organizer arrived in Boston in early 2015, signing a five-year deal with Mayor Martin J. Walsh to hold the race in the Seaport District over Labor Day weekend. The race was planned for a 2.2-mile temporary street course around the Boston Convention & Exhibition Center. Long negotiations followed with the city and state agencies that controlled portions of the proposed racecourse, and it seemed this spring that the race promoters were close to locking down agreements. But talks failed, and Casey announced in late April the race was canceled. He accused the city of making unreasonable demands. The city shot back that the promoters were disorganized.
Healey's threatened litigation may not be the end of the lawsuits.
Billionaire car dealer Herb Chambers has issued demand letters to Boston Grand Prix and will sue if not repaid $100,000 in lost sponsorship money, said his spokesman George Regan.
Regan on Tuesday accused race promoters of "living large on other people's dimes" while organizing the race.
Chambers was the "official auto dealer" of the race, according to promotional material produced by the Boston Grand Prix.
Todd Ulrich, a 52-year-old racing fan from Hollis, N.H., said Tuesday night that he is among those still waiting for a refund. He paid about $1,100 on March 11 for grandstand tickets for the event, he said.
Ulrich is pleased Healey is moving toward litigation.
"I think it's egregious there's no funds for returns," he said. Ticket revenue should have been held in a separate fund so it would be available in case the race was canceled, he said.
Ulrich has made complaints to the Better Business Bureau, he said, and initiated a charge back on his credit card to try to have the charge removed. His charge back claim has been pending since early May, he said. Mark Arsenault/Boston Globe
06/18/16
| The neighbors who opposed the race and caused the promoter to go bankrupt now have some concrete barriers to stare at for years. Alternately they can write a check from the personal accounts to have them removed. |
The contractor who built the concrete barriers for the Grand Prix of Boston course says he got stiffed by the promoters and won’t take back the 9,400-pound behemoths now sitting on the Boston waterfront, raising questions about who will get rid of the unsightly blocks.
Steve Ray, owner of George Roberts Co., which made nearly 2,000 of the specially constructed barriers that were supposed to line the IndyCar course, told the Herald that Grand Prix walked away without paying a big chunk of its bill.
“For a small company like ours, it’s quite a significant amount of money and it’s going to create quite a strain on us," said Ray, whose company in Alfred, Maine, employs 43 people. “I still have about a hundred of them right here in my yard."
The barriers, now stored on a prime waterfront parcel owned by the Massachusetts Port Authority, are the most visible reminder of the IndyCar race debacle, which ended when the promoters abruptly canceled amid a financial crisis. Attorney General Maura Healey this week launched an investigation into the Grand Prix’s finances and is pressing the promoters to pay back ticket-holders and vendors.
Massport agreed to take the concrete blocks — what one expert called “Jersey barriers on steroids"– even though the land is legally reserved for “maritime" uses only.
After initially exploring buying them to use for security at Logan International Airport, Massport now says it wants the huge barriers off its property. The problem is that Grand Prix of Boston is shut down and has no plans of removing them.
The promoters even stiffed Massport on the rent, paying only through March, according to officials. A security deposit covered two more monthly payments, but now no one is paying Massport for use of its land.
“We want them off the property as soon as possible," spokesman Matthew Brelis said.
The contract for the barriers was a huge boost for the Maine company that built and transported them, but Ray said he was “disappointed" in how Grand Prix CEO John Casey suddenly walked out on its deal. Casey announced he was canceling the race just after 5 p.m. on April 29.
“The funny thing is I spoke to Mr. Casey at 4:45 p.m. on the 29th and he never said anything to me," Ray said. Joe Battenfeld//Boston Herald
06/18/16
| Will the Boston GP tell the judge "Your Honor, the people of the the city of Boston made us so unwelcome and made us waste money on many frivolous demands we spent all the money meeting them. There is nothing left. We are bankrupt. Sorry your honor." |
Attorney General Maura Healey said she’s using subpoenas against local IndyCar promoters to understand how they left ticket holders high and dry.
“We made it clear to the companies involved here: they need to come up with a plan ASAP to get refunds made. And we’re going to continue to work to make sure that ticket purchasers are made whole in short order. I also want to get to the bottom of where the money went," she said on Boston Herald Radio’s “Morning Meeting" show yesterday.
The suit against Grand Prix of Boston, announced Thursday, includes a subpoena that will require local promoters to release their financial records for the event.
“We want to make sure that we’re clear with entities wanting to come in to do these kinds of events here in our state that they play by the rules and that they be fair and square," Healey said. “Unfortunately we’ve got thousands of people who purchased these tickets who have been left high and dry and we’re going to fix that and we’re going to hold accountable the entities involved so that happens."
Healey said she met with parties tied to the race and IndyCar officials this week with much focus on the refund, which she called her main focus.
She added: “We’ll take it one step at a time, but it is pretty simple, and what needs to happen is pretty simple, and we’re just going to work to make that so." Jordan Frias/Boston Herald
06/16/16 Fixed image below. Click on it if it does not automatically animate.
06/16/16
Top consultants for the canceled Grand Prix of Boston helped fatten Attorney General Maura Healey’s campaign fund this week as Healey belatedly began looking into complaints from ticket buyers still owed hundreds of thousands of dollars in refunds.
Healey’s campaign fundraiser Thursday night at the Wang Center was attended by three Grand Prix lobbyists and consultants, Chris Keohan and Kate Norton of CK Strategies, and a government relations consultant, Daniel Passacantilli. Norton said they were invited to the event more than a month ago.
Both Keohan and Passacantilli own equity interest in the failed IndyCar race, which is now broke and without the funds to pay back millions to ticket buyers, vendors and sponsors. Keohan is also a campaign adviser to Boston Mayor Martin J. Walsh while Passacantilli’s brother, Stephen, works in the Walsh administration.
Healey’s involvement comes weeks after the Herald first reported ticket buyers were not getting refunds and that Grand Prix organizers had already spent the proceeds.
A Healey spokeswoman told the Herald last month the AG had received no complaints from IndyCar ticket buyers and was not looking into widespread reports in the Herald and on social media about the lack of refunds.
Michael J. Malloy, an attorney in North Easton, said he bought $480 worth of tickets and filed an initial complaint online with Healey’s consumer division more than a week ago and then another complaint several days later, but has not gotten a response.
“It’s more the principle. Corporations can get away with a lot, but what they can’t get away with is fraud," Malloy said.
But a Healey spokeswoman insists her office didn’t get any complaints until this week, and shortly after that began “discussions" with race organizers about refunding ticket buyers’ money.
Sources said beleaguered Grand Prix CEO John Casey met with the AG’s staff and laid out his plan to refund the money, saying he 
expected to get funds coming in soon.
Walsh, after initially saying he couldn’t do anything about the refunds, toughened his stance yesterday, saying the attorney general “probably" should investigate.
But it’s unclear where the refunds will come from, and ticket buyers aren’t the only ones looking for cash. A number of sponsors and vendors, including LogMeIn, Herb Chambers auto dealership, Firestone and others are demanding back hundreds of thousands of dollars they already gave to the Grand Prix.
Casey initially promised that the Grand Prix would begin refunding ticket buyers days after he abruptly canceled the race in late April. He then amended that, saying it could take a few months.
But most ticket buyers have yet to see any refunds, and some have lost several thousand dollars. A flood of complaints started pouring into the Grand Prix’s Facebook site in mid-May, with ticket buyers saying they had contacted race organizers but hadn’t received their money. Joe Battenfeld/Boston Herald