CHARLOTTE, N.C. -- While disappointed that the BK Racing assets commanded only $2.38 million, the trustee of the team is looking to sell to winning bidder Front Row Motorsports.
Front Row submitted the winning bid of $2.08 million on Monday for the charter, most of the assets and titled vehicles. GMS Racing, which had bid $1.8 million, didn't attempt to match Front Row's bid.
In addition to the sale to Front Row, the trustee has agreed to sell some secondary assets to Obaika Racing for $265,000 and a tractor to Rick Ware Racing for $35,000.
The result of the sale was announced Tuesday morning in U.S. Bankruptcy Court, and Judge J. Craig Whitley set a Thursday hearing to determine whether the sale is in the best interest of the estate. At the hearing Tuesday, there were enough objections to the sale and requests for more time to prepare arguments that the judge granted that request, as Thursday already had been set aside as a date to hear objections.
"Frankly, your honor, we're disappointed ... [but] this is the process that made the most sense for us," said Michael Martinez, attorney for trustee Matthew Smith.
There were hopes to get more for the team and a robust sale Monday, considering Front Row Motorsports bought a charter from BK Racing for $2 million following the 2016 season.
BK Racing owner Ron Devine, who filed for the team's bankruptcy three days prior to the season-opening Daytona 500 and claims he is owed $15 million in loans to the team, was trying to put together a new company to bid. But he said that once he had proof of funds, it was too late for him to participate in the bidding.
He is working on alternative plans to the sale, as is Race Engines Plus, the team's engine provider.
Front Row Motorsports already owns three charters -- the two it races, and the one it leases to TriStar Motorsports. The charter it previously bought from BK Racing is subject to a lawsuit by Union Bank & Trust, which believes it should be the owner of the charter because of a lien it argues it had on the charter when it was sold.
If it buys the team, Front Row would have to field a third car in the short term to keep the charter. Front Row Racing general manager Jerry Freeze said it was still to be determined, if the team is successful in purchasing the BK charter, on whether it would field a third car next year.
The trustee will determine how much creditors get from the sale, but he must pay NASCAR $50,000 to transfer ownership of the charter and back pay $68,046 in charter member fees (entry fees) to NASCAR.
There have been 78 claims filed totaling $44,295,884.91. The sale won't cover the claims. The Internal Revenue Service is among those who have filed claims, seeking approximately $2.9 million in payroll taxes and penalties.