BK Racing has filed for bankruptcy.
That’s the news from ESPN and Kickin’ The Tires, which reported the news on Twitter.
Kickin’ The Tires notes that BK Racing owes between $10 and $50 million to creditors — a huge spread.
But ESPN went a step further, noting the NASCAR could take the team’s charter as a result.
Filing for bankruptcy may have been the only option for BK, which has been saddled with debt and a constant stream of bad news. The proceedings will allow the team to reorganize its debt and work out a plan with its creditors. But at the same time, you have to wonder whether sponsors will line up to partner with a team that’s in bankruptcy court.
BK is scheduled to race Sunday at the Daytona 500, with Gray Gaulding at the helm.
BK has already had some of its equipment added to an auction page (since removed) to help settle a tax debt. It’s embroiled in a dispute with a bank over its debt. It’s driver, Coey LaJoie, left for Tri-Star Racing and crew chief Doug Richert left, too.
The constant stream of bad news has had an impact on the team, and Devine told Frontstretch sponsors have left the team as a result.
“They left because of all the bad publicity we get,” Devine said. “I don’t blame them. I don’t blame the sponsors for being leery because of all the stuff they hear about BK Racing and all the stuff they read – all the stuff about I’m in a battle with a bank and because of my IRS situation that has been going on for many, many years. I’m absolutely sick of it. It sickens me to my stomach that people scoop that low and make a bigger issue out of something than it really is.”
Big issue or not, the bad news has certainly had an impact. While BK Racing will race the No. 23 at Daytona — and says it plans to race the car in all 36 Cup Series races — it just last week named Gaulding as its driver. The team also still has the No. 83, but Devine doesn’t know whether it will see the track this season.
“God bless NASCAR for putting up with all the nonsense around us,” he said. “I’m so grateful. My goal this year is to clean that up.”
All of this comes against the backdrop of continued financial issues plaguing the team. Union Bank and Trust has asked a court to appoint a receiver to operate the team, according to an ESPN report. By doing so, the bank could then sell or lease BK’s charter. which would recoup some of the money the bank says the team owes.
The bank claims BK owes it more than $7 million, and the North Carolina Department of revenue has already seized $210,000 in assets.
However, the bankruptcy filing could very well but a stop to any further court action. At least for now.