CART CEO and president Chris Pook has admitted that, while disappointed to see the initial rescue plan for the series fall by the wayside, he is happy with the new agreement with Open Wheel Racing Series that should see the Champ Car World Series run in 2004.

CART shook on an 'asset purchase agreement' with OWRS at a meeting earlier this week, effectively ending hopes of a merger that would have had to have been agreed by a shareholder vote set for Friday [19 December]. The agreement will allow OWRS to purchase the assets of CART Inc needed to operate the Champ Car World Series and the stock of Pro-Motion Agency Inc, a CART subsidiary that operates the Toyota Atlantic support series. In addition, OWRS will assume the rights and obligations under certain promoter, sponsor and other contracts from CART.

If the transaction is completed, OWRS has said that it intends to continue to operate the Champ Car World Series and Toyota Atlantic series. The total consideration that will be paid if the agreement is completed is $3million less $1.5million needed to pay 2003 prize money to teams not affiliated with OWRS, an obligation of CART being assumed by OWRS.

The agreement terminates the previously announced merger agreement that had been entered into between CART and OWRS on 10 September. As a result, CART will cancel the special meeting of its stockholders regarding the merger agreement that was scheduled to occur on 19 December. Representatives of OWRS had advised CART that they did not believe that certain conditions to close the merger agreement were going to be met and, therefore, the merger would not be completed.

CART considered OWRS's position and believed that the closing condition requiring the absence of a material adverse effect could not be satisfied because of a decrease in the number of teams planning on participating in the 2004 season.

"We are very disappointed that the conditions of the merger could not be satisfied," Pook said, "However, we nevertheless believe this new transaction is CART's best available option and intend to move forward diligently and promptly."

The agreement requires CART to commence a case under Chapter 11 of the US Bankruptcy Code. The filing will include a motion asking the bankruptcy court to approve the sale of CART's assets pursuant to the agreement. CART will continue to operate its business as a debtor-in-possession during the court supervised sales process. Assuming the sale is completed, it will then proceed to wind up its business affairs. It is anticipated that CART Inc's filing with the bankruptcy court could be as early this week.

The agreement is subject to a number of conditions, including the absence of injunctions, the accuracy of representations and warranties in all material respects, performance of material obligations and the issuance of a final approval of the bankruptcy court in accordance with the provisions of the agreement, including obtaining any third party consents to the extent required to obtain such final approval. If the agreement is not able to be completed, CART's board of directors would evaluate alternatives, including ceasing operations, winding up the companies affairs and liquidating its remaining assets.