By Jerry Jordan, Editor
Five days after a $1.46 million binding arbitration award was levied in a Mecklenburg County, N.C. case involving Ron Devine and BK Racing, Kickin’ the Tires has confirmed through public documents that Devine encumbered the company’s equipment, supplies and racecars in a UCC filing for a $15 million line of credit from Virginia Racer’s Group, a company managed by his wife.
The binding arbitration award involved Race Engines Plus (REP) and money proven to be owed by BK Racing for engines and parts provided from 2013 forward. Additionally, the award required REP to return equipment and engines to Devine’s BK Racing. That arbitration ruling came on December 12, 2016. An order to that affect was signed by the Honorable Judge Richard Doughton of Cabarrus County on January 3, 2017, after the Mecklenburg County records were filed in Cabarrus County to secure the money owed.
According to the Amended Arbitration Decision Award:
- For the 2013 race season, are defendants entitled to recover approximately $537,000 from BK Racing? Alternatively, is BK Racing entitled to a credit for amounts paid in 2013 for its engine program, which payments were above and beyond the $2.4 million original contract amount?
“YES. The REP entities are entitled to recover $537.386 from BK Racing with pre-judgment interest totaling interest at the rate of 8% per annum from January 1, 2014, a per diem rate of $117.78 for pre-judgment interest totaling $126,735 through December 12, 2016, and a total award of $664,121 with interest thereon at the legal rate of 8% from December 12, 2016.”
- For the 2014 race season, are defendants entitled to recover from BK Racing taxes, insurance and a fair rental value for the real estate and/or personal property? If so, what amount(s)?
“YES, as to the real estate and NO as to the taxes, insurance and fair rental value for the personal property. The REP entitles are entitles to recover a fair rental value for the real estate in a monthly amount for eleven (11) months in 2014 for a total principle amount of $257,400 with pre-judgment interest at a rate of 8% per annum from January 1, 2015, a per diem rate of $56.41 for pre-judgment interest totaling $40,112 through December 12, 2016, and a total award of $297,512 with interest thereon at the legal rate of 8% from December 12, 2016. The REP entities are not entitled to recover amounts from BK Racing for taxes, insurance and/or fair rental value or any personal property.”
- For the 2014 race season, is REP entitled to recover approximately $286,000 from BK Racing for parts utilized in BK Racing’s engines?
“YES. The REP entities are entitled to recover from BK Racing the principle amount of $286,128 with pre-judgment interest at the rate of 8% annum from January 1, 2015, a per diem rate of $62.71 for pre-judgment interest totaling $44,589 through December 12, 2016, and a total award of $330,717 with interest thereon at the legal rate of 8% from December 12, 2016.”
- Did defendants wrongfully withhold BK Racing’s engines and engine parts during the 2014 off-season? If so, what damages is BK Racing entitled to recover?
- For the 2015 race season, is REP entitled to recover approximately $230,000 that it claimed is owed?
“YES. The REP entities are entitled to recover from BK Racing the principle amount of $158,466 with pre-judgment interest at a rate of 8% per annum from May 21, 2015, a per diem rate of $34.73 for pre-judgment interest totaling $19,832 through December 12, 2016, and a total award of $178,298 with interest thereon at the legal rate of 8% from December 12, 2016.”
- Did defendants wrongfully withhold BK Racing’s engines and engine parts following the parties’ split in April 2015? If so, what damages in BK Racing entitled to recover?
- Is BK Racing entitled to the immediate return of its engine/engine parts?
“YES. It is hereby ordered that the REP entities to release BK Racing’s engine/engine parts within 15 days from December 12, 2016, or as otherwise agreed upon by the parties. The engine/engine parts shall be made available for BK Racing to pick up at REP/s facility and BK Racing shall be responsible for its costs in retrieving the engine/engine parts.”
When contacted, Joey Arrington, the principle of Race Engines Plus (REP) said the public record speaks for itself and he is hopeful that he will recover the money his company is owed soon.
The December 19, 2016, UCC filing lists Virginia Racers Group LLC as the holder of the $15 million line of credit and has an itemized accounting of the team’s equipment, cars and other items as collateral. Previous records filed with the state of North Carolina show Brenda Devine, Ron Devine’s wife, as the “manager” of Virginia Racers Group.
“All machinery, equipment, fixtures, appliances, furniture or inventory now owned or hereafter acquired by Debtor’ all accounts, contracts rights and accounts receivable now or hereafter in existence; all general intangibles, now used or hereafter acquired or arising, all substitutes and replacements for, attachment and other additions to the foregoing, and all property similar to the above hereafter acquired by debtor; all cash or non-cash proceeds of any of the foregoing; all ledger sheets, files, records, documentation and instruments evidencing an interest in or relating to the foregoing,” states the UCC Financing Statement from the North Carolina Secretary of State.
Devine was direct in his response to the arbitration and reiterated that he was the one who brought the original claim in the matter and had filed the original lawsuit against REP.
“Here is what really happened,” Devine said. “What they did was put us in an interesting situation where I got all his motors back. He got a judgment and I got my motors. The award for him was pretty small but with interest it adds up to a sizeable number. Did he really get anything? The important part is that I got my motors back. I sued him. We took an action against REP to collect its inventory and we got that back. The judgment is in his favor but we got back the inventory, which is what we needed. We sued each other personally and we were both dismissed.”
Devine said he is happy with the resolution and is looking forward to the 2017 race season. However, he did not specifically indicate what his plans were for obtaining engines going forward, though he noted that he would like to build his own.
“Yes, we are happy to have our inventory back,” Devine said. “I’m not sure if we’ll continue with REP. I am just trying to figure things out. I also did BK Engines which was done out of the REP shop. We felt like we were successful against REP and we got our inventory back and worked towards a successful resolution. In the meantime, we are doing better and excited about Daytona and looking forward to 2017.”
Devine said the filing of the UCC document was “cleaning up” other issues with previous filings.
“That has been around for a long time but we were just cleaning up our act,” he said. “There are some bank loans and other things in there, including partner debt, so we were just getting things in order.”
A records search did find previous UCC filings for BK Racing and Devine.