Andretti Motorsports finds itself caught in the middle of a bankruptcy case and now faces a lawsuit from creditors who wants some sponsorship money back
HH Greg paid Andretti $1.5 million in sponsorship fees before the electronics retailer filed for bankruptcy on March 6 and closed more than 220 stores nationwide shortly thereafter.
According to a report in the International Business Journal, the unsecured creditors claim that HH Greg signed a pair of deals with Andretti. The first would pay out the $1.5 million for the entire team, while another $2.75 million annually would go toward the sponsorship of Marco Andretti’s car.
The creditors, in a lawsuit cited by the Journal, claim that Andretti received $1.46 million before HH Greg shuttered its business. (The remainder of the money went to the management fees of a marketing company).
The creditors want Andretti to pay back the $1.46 million, plus interest and attorney fees, claiming that the sponsorship dollars “preferential payments” when the company was in severe financial distress.
The Journal noted that under bankruptcy law, debtors may be able to get back preferential payments made 90 days before a bankruptcy filing. The Journal says all but one of the payment were made within that time period.