Ken McGuire, the attorney representing current Race of Champions owner Joe Skotnicki, released a statement on his client’s behalf Friday afternoon in an attempt to clarify the current legal dispute between Skotnicki and former series owner Andrew Harpell.
The statement reads as follows:
In order to be fully transparent and to let all interested parties be fully informed about the status of the dispute between the former and present owners of the Race of Champions, Asphalt and Dirt Racing series, the following is the official information from Joe Skotnicki, present owner of the RoC.
In June of 2015, the sale of the series, to be effective at the end of the 2015 season, was negotiated. Pursuant to that sale agreement, a substantial payment (in excess of One Hundred Thousand Dollars) was made by Mr. Skotnicki to Andrew Harpell. The check was cleared on June 30, 2015. While there was lots of “boiler plate” language in the sales contract, the two most important issues were, first, the series would be delivered after the completion of the 2015 season 100% debt-free. Second, the remaining balance of the sale price would be made in five payments, the first of which was scheduled for January 1, 2016.
Towards the end of 2015, Mr. Skotnicki began getting calls from many companies, and several drivers who claimed that they were owed money by the RoC, and that many of those payments were past due. The total owed by the series was more than eighty percent (80%) of the total of the remaining payments. Substantial amounts were owed to both Hoosier Tires and American Racer Tires, in addition to the 2015 season point fund not being funded.
It is well-settled law that once a party to a contract makes a substantial breach, the other party is relieved of his duty to complete his obligations. In other words, once the series was delivered heavily in debt, the buyer had no further obligation to make payment.
To protect the integrity and reputation of the series, and to insure that it could continue to do business with its suppliers, and to see that the purse and point fund monies were paid to the drivers who earned them, Joe Skotnicki, through his lawyer, Ken McGuire, Jr. informed Mr. Harpell that either he void the contract and returned the original payment, or consent that Joe Skotnicki use the money owed to him to pay those debts still outstanding. The plan was to take each payment as it became due, and distribute it pro-rata to Harpell’s creditors. For several weeks, Mr. Harpell would neither consent to that plan or suggest any alternative plan, other than to demand payment to him, of the January payment.
Mr. Harpell has been heard to allege that Joe Skotnicki has no money to pay the January payment. In order to refute that allegation, Mr. Skotnicki has deposited in Ken McGuire’s Attorney Escrow Account, the full amount of the January payment. That amount of money will be distributed pro-rata to each of the companies that are owed money by Harpell. The balance of that amount will remain in McGuire’s escrow account so that the point fund and unpaid purse monies can begin to be paid. While Mr. Harpell has also been heard to allege that he has paid some monies towards the amounts owed, no proof has been forwarded to either Skotnicki or McGuire, despite written demands that Harpell provide such proof. McGuire has personally confirmed that neither Hoosier Tire nor American Racer has been paid anything towards their respective outstanding balances, each of which exceeds the full amount of the January payment.
Once all creditors of the RoC have been paid, Mr. Harpell will then receive the balance of monies owed to him on schedule. As the next payment is not scheduled until June, 2016, McGuire, on behalf of Skotnicki will continue to explore settlement with Harpell and his attorney. If no resolution is reached, the amount of the second payment will be distributed in the same manner as the first.
The 2016 Race of Champions Asphalt and Dirt Modified Tour seasons will not be impacted at all due to this legal dispute. Speed51.com will have more on this story as it becomes available.