BK Racing filed for bankruptcy on Thursday, and NBC Sports uncovered the filing that shows how much debt the team has.
BK has liabilities of more than $10 million and estimated assets of at least that much (the estimated spread is $10- $50 million, NBC reported. Kickin The Tires incorrectly reported that BK owes $10 to $50 million).
Some 20 companies have unsecured claims against BK, meaning they don’t have a lien against any BK property. Those companies are owned a combined $1.2 million. The largest unsecured claim belongs to Race Engine Plus, which says it’s owed almost $570K. Champion Tire and Wheel is owed almost $95K.
Additionally, Union Bank and Trust says BK owes it more than $8 million, the team is facing a federal tax lien of $667K, and owes the North Carolina Department of Commerce $66K, NBC Sports said.
Team owner Ron Devine, in a text to ESPN, said, “BK will do everything it can to continue to race.” As of this writing, BK is still scheduled to race at Sunday’s Daytona 500, with Gray Gaulding behind the wheel.
“I’m not really worried about all the other stuff,” Gaulding told ESPN. “My job is to go out there and drive, be focused and do the best I can for my team and BK Racing. I’m just excited about it.”
NASCAR, which has the power to revoke BK’s charter, said in a statement:
“We have a clear process around charter member governance. It is incumbent upon charter members to be ready to race and compete at the highest level. BK Racing remains the holder of the charter.”
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.
The negative 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. 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.
However, the bankruptcy filing could very well but a stop to any further court action. At least for now.