By Jerry Jordan, Editor
DAYTONA BEACH, Fla. – After running out of time to reach a deal with Union Bank & Trust, BK Racing, which races in the Monster Energy NASCAR Cup Series, filed for Chapter 11 bankruptcy protection, according documents obtained from the U.S. Bankruptcy Court for the Western District of North Carolina.
Ron Devine is publicly known as the team’s owner; however, court documents show his wife, Brenda Devine, as the managing partner of the company. In filing bankruptcy, Brenda Devine, assigned Kathy Burch as power of attorney for the handling of the legal proceedings and paperwork.
The documents show BK Racing owes between $10 million and $50 million to less than 99 creditors with . More than $1.2 million being unsecured debt. More than half of what is owed in unsecured debt by Bk Racing is to its engine provider Race Engines Plus (REP). Last year, Devine won a court case against REP and was allowed to recover multiple race engines belonging to the company. The order also required Devine to pay approximately $1.46 million to REP.
According to a UCC filing, obtained by Kickin’ the Tires (KTT), BK Racing posted its NASCAR charter, currently used on the No. 23 car, as collateral for a loan from the bank. The bank is claiming that BK Racing still owes it about $8 million on the loan principle. In filing bankruptcy, Brenda Devine, assigned Kathy Burch as power of attorney for the handling of the legal proceedings and paperwork.
Ron Devine told KTT he believed negotiations were going well and BK Racing was very near to reaching an agreement that would allow them to go forward without filing bankruptcy.
“We were close to a deal with the bank, just ran out of time,” he said. “We will race and we will work hard to fix our business and come of Chapter 11 as fast as we can.
“In the end this will be better for the hard work the employees have put into the company and I’m still committed to racing.”
Sources told KTT that another team in the NASCAR garage was hoping to buy BK Racing’s charter from Union Bank & Trust but the bankruptcy proceedings have ended any attempt that may have been in play. Devine said he was focused on the team and praised the work of the BK Racing employees that have stuck by his side but would not speculate on other team’s motivations.
Asked whether the current situation would affect BK Racing’s ability to compete in Sunday’s 60th running of the Daytona 500, a spokesperson from the sanctioning body stated, “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.”
Gray Gaulding is scheduled to drive the No. 23 BK Racing entry Sunday; however, the team did not make an attempt to qualify and made only one lap during practice.