04/03/2012
NEWS STORY
Tavo Hellmund, the driving force behind the United States Grand Prix in Austin, has filed a lawsuit against his former partners in the project, a move which could threaten the event.
The civil suit, which has been filed in District Court in Travis County, in which the Circuit of the Americas (COTA) is located, is against Bobby Epstein and Red McCombs together with various companies and managers involved in the project.
Some see the move as a power play, with Hellmund aiming to buy out McCombs who is understood to have a 20 percent stake in the project thought to be worth around $8m.
"With the relief requested herein - namely, access to the Company's books and records and declaration that he cannot be removed as a manager - Hellmund hopes to steer the now-teetering Circuit back on track and determine how best to proceed, if at all, to acquire Epstein's remaining interest in the company."
While the suit does not specify damages, Hellmund is thought to have had an agreement for a buyout that was not fulfilled, and that he was due to receive $500,000 a year for 10 years in his role as chairman of the Grand Prix.
Though Hellmund has not yet commented, Epstein told the Statesman he was unaware of the action, adding that Hellmund has not worked for Circuit of the Americas for some time.
"This is just a latest step in a pattern of behaviour," said the COTA management in a statement. "Mr. Hellmund uses negative press to try and create an advantage for himself at every turn. The fact is, he has been found to be in breach of contract by Formula 1 and he has not fulfilled his agreements."
The suit claims that a buyout agreement was reached with Hellmund last September, whereby he would receive $18 million for his share of the company and for assigning the contracts of Formula One and MotoGP to Circuit of the Americas, but that this didn't happen.
While the various parties wrangle, the big concern is that such a lawsuit could jeopardise the event deterring potential investors and even the state of Texas from actually backing the event. Should investors be put off by the action this could lead to another hold up in the construction of the facility, due to host the inaugural Grand Prix in just eight months.
Another reason the investors might be deterred is that should Hellmund win the action and gain control he might not want, indeed need, their money.
All in all, it's a bit messy.