Front Row purchase of BK Racing approved

CHARLOTTE, N.C. — Front Row Motorsports is now a three-car team, but the driver, car number and car manufacturer it will field as its third entry at Darlington Raceway next week is still to be determined.

U.S. Bankruptcy Court judge J. Craig Whitley approved the sale of the BK Racing charter and most of the assets for $2.08 million Thursday afternoon. The sale is expected to close Thursday afternoon.

Front Row already had owned three charters — NASCAR’s version of a franchise that guarantees a team a starting spot in each NASCAR Cup Series race as well as minimum purse money based on competing in the race and its performance over the past three years — and the BK Racing charter gives it four.

Front Row fields Fords for David Ragan and Michael McDowell, leases one of its charters to TriStar Motorsports and now must field a car immediately and in all races this season in order to keep the charter it bought Thursday.

Front Row Motorsports general manager Jerry Freeze said Thursday following the hearing that the team will now start working on the transition to determine whether to use BK Racing equipment (which are Toyotas while his team is Ford) and who will drive. The team also typically uses No. 35 when it runs a third car, and it might want to change the BK No. 23 to No. 35.

Front Row owner Bob Jenkins eventually wants to have three cars, Freeze said, but to do so for 2019 might not be feasible. But Jenkins, who bought assets from Petty Enterprises in January 2009 to boost his Cup program when the Pettys were merging with Gillett Evernham Racing, viewed this as an opportunity to get some equipment and a charter.

“[Three cars] would be a big challenge,” Freeze said after the hearing. “We think there is some market for sure [to sell or lease the charter]. It was worth taking the chance at the opportunity.”

Front Row bought a charter from BK Racing for $2 million after the 2016 season, but Union Bank & Trust has sued Front Row and others claiming it owns that charter as collateral for an unpaid loan. Freeze said that litigation was not a factor in the purchase Thursday.

The judge approved the sale Thursday over the objection of Ron Devine, the former BK Racing owner who filed for Chapter 11 bankruptcy the Thursday before the Daytona 500. Whitley said he was approved the sale because the two secured creditors — Union Bank, which claims it is owed $9 million in unpaid loans from BK Racing, and the Internal Revenue Service, which claims it is owed $2.9 million in unpaid payroll taxes and penalties — didn’t object to the sale and the process followed sound business judgment.

The process didn’t get what it wanted for the team. There were only two bidders, and there was hope of a robust auction Monday. Instead, there was no real auction. Front Row Motorpsorts already had submitted its bid for $2.08 million and the only other bidder, a group headed GMS Racing president Mike Beam, opted not to increase his original $1.8 million bid. A GMS spokesman said the team is looking in another direction.

“We’re not disappointed with the buyer … while I am disappointed we didn’t have more budding and a higher purchase price for the team,” said Matthew Smith, who has been operating the race team since March as the trustee appointed by the court and admitted he was “shocked” there were no additional bidders.

Devine, who claims he has loaned the team $15 million to keep it operating in recent years, said he would like to return as a NASCAR owner.

“I’ve got other options,” Devine said. “I still love NASCAR. I believe the NASCAR business is special and headed in the right direction.”

Devine disputed the notion that the Smith did a good job running the team.

“At the very least he should be embarrassed. … I thought we put up a good fight [to avoid the sale],” Devine said.

Smith, who could only operate the team on the purse money and sponsorship, testified he was proud of the work he had done. He also testified that Devine’s business records were “atrocious” and the first thing he did after becoming the trustee was to tell the employees they would be paid because they had not gotten paid by Devine.

In addition to the sale to Front Row, some older cars in storage as well as a transporter were sold for $265,000 to Victor Obaika, who has fielded an Xfinity Series team in recent years. Obaika said he hoped to start racing in Cup soon with that equipment. Rick Ware, who operates a NASCAR Cup team, bought a tractor that hauls a trailer for $35,000.

From those sales, the trustee must pay $50,000 to NASCAR for a charter transfer fee, $68,046 in entry fees that the team is behind to NASCAR and $75,000 to GMS Racing as a breakup fee for its work as the original base bid.

There have been 78 claims filed totaling $44,295,884.91.

“Is the price fair and reasonable?” Whitley said in giving his ruling. “Fair and reasonable compared to what? … We got what we got.”