The proposal designed to speed up the 'death' of CART and get wheels in motion for a replacement series in 2004 has stalled momentarily as lawyers pore over plans to liquidate the championship organiser ahead of a scheduled stockholder vote.

Potential Champ Car saviour Open Wheel Racing Series [OWRS] has replaced its proposal that CART shareholders be offered 56 cents a share to buy-out the ailing operation with one that calls for the company to file for bankruptcy. That would allow OWRS to buy up whatever assets it needs to reform the series in 2004, as well as buying extra time to get things up and running, and would save money that could be spent on restructuring.

As a result of this season's losses, CART's share price dipped to just 15 cents yesterday [Monday] - some 40 cents a share below the price offered by OWRS.

While many in the series feel that a swift end would be the best thing for all concerned, however, there are those who feel that the liquidation option is a little too convenient, and have called on legal teams to comb through the latest proposal to ascertain its viability.

According to the Indianapolis Star newspaper, the CART board had hoped to meet late last week to vote on the latest proposal, but was told by its lawyers that a bankruptcy court was unlikely to approve any plan that ignored the shareholders.

With a fourth-quarter financial report still to come, CART has already revealed losses of $77million, and another average report for the final quarter would all but deplete the company account.

While shareholders question why the company spent what it did through 2003, CART still believes that it did right by forking out to keep the series alive. As well as paying teams around $43,000 per car perm race to ensure it met promoter's demands for an 18-car minimum field, the company also paid $14million for television coverage, and $21million to promote six of its events. It also accepted less in sanctioning fees as it sought to re-establish a foothold partly eroded by the success of the rival IRL. Further losses were due to legal expenses and provisions made for the impending merger with OWRS.

The consortium behind OWRS has said that the operation is prepared to begin paying for the series from the start of the New Year, and insists that it wants to preserve the future of Champ Car racing.

"From all indications we're getting, I think these guys aren't wavering on wanting to buy the series," Patrick Racing's Jim McGee admitted, "They're just changing their business approach. If you're buying a company, you want to buy its assets and not its liabilities."

OWRS founder - and CART team owner - Paul Gentilozzi told the Indianapolis Star that, if the sale goes through as proposed, shareholders should receive some compensation, but admitted that that would be the responsibility of the board, and not the new owners.

"When you're buying a company that's in trouble, you first analyse how it got there," Gentilozzi said. "We've turned this thing upside down looking at it. It's not like the product is irretrievably broken. We don't need to waste money. But if we didn't believe in what we were doing, we'd go buy a couple of (IRL) cars and go racing."

 

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