Grand Prix founder seeks injunction against race organizers

Asks judge to prevent organizers from using ticket sales as loan collateral

August 24, 2011|By Julie Scharper, The Baltimore Sun

The founder of the Baltimore Grand Prix asked a judge Wednesday to prevent organizers of the race from using ticket sales as collateral on future loans because, he alleges, they have failed to make tens of thousands of dollars of payments to him.

In separate lawsuits filed in Baltimore City Circuit Court, race founder Steven Wehner and early investor Sean Conley allege that current race organizers have defaulted on payments to them.

Wehner and Conley write that the amount that race organizers have borrowed indicates "the real possibility that little, if any, unencumbered monies would be available to satisfy [their] obligation to the Plaintiffs or the rest of the creditors providing goods and services … for the Baltimore Grand Prix."

Jay Davidson, who took over Baltimore Racing Development after Wehner departed early last year, declined to comment Wednesday on the specific allegations in the suit.

Davidson wrote in an email that the injunction, filed nine days before the scheduled start of the three-day event, "seems to me to be an 11th-hour attempt to harass the Baltimore Grand Prix."

"We have a major event to focus on that will showcase Baltimore to the nation and beyond and we aren't going to be distracted from our task," he wrote.

But Wehner, who conceived and sold city, state and IndyCar officials on the idea of an open-wheel auto race through the streets by the Inner Harbor, alleges that race organizers failed to pay him $49,500 that he was due in December as part of a stock redemption agreement and have paid him only some of the $11,000 monthly consulting fee he says he was owed in a severance deal.

Wehner is suing race organizers for the full $575,000 that he says he is due under a May 2010 agreement, in which he sold his 10.2 percent share of the company.

Conley, a real estate developer from Martha's Vineyard, filed a separate suit demanding $318,750 he says is owed to him for the 5.2 percent share of the company that he sold back to the group.

City officials have pledged $7.75 million for roadwork to prepare for the three-day event, which is slated for Labor Day weekend. The state's economic development arm loaned race organizers $500,000 late last year.

Wehner alleges that Baltimore Racing Development organizers borrowed $1.1 million in the past 60 days from a company tied to one of the race's managers. M&T Bank, which has been named a race sponsor, also loaned the group $1.6 million in the past 60 days, according to the suit.

Wehner alleges that race organizers secured both loans by using an escrow account containing advance ticket sale proceeds as collateral.

Wehner states that payments from the Grand Prix are his primary source of income. He says he cares for his mother, who he says suffers from Alzheimer's, and that he lives "in the basement of my mother's home, relying heavily on this meager accommodation as my only residence."

Wehner has struggled with addiction to cocaine and crack, and was given probation before judgment in January for a drug possession charge last July.

Davidson, a former corporate attorney, said to "consider the source of the allegations and the motivation behind them."

Baltimore Sun reporter Justin Fenton contributed to this article.

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