Texas MotoGP Round Faces Legal Disputes

March 9, 2012
Bart Madson
By Bart Madson
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Bashing away at the MotoUSA keyboard for nine years now, Madson lends his scribbling and editorial input on everything from bike reviews to industry analysis and motorcycle racing reports.

More legal disputes threaten to derail the 2013 MotoGP race at the new Circuit of the Americas (COTA). Contract disputes that nearly sidelined the 2012 Formula 1 race at the Austin, Texas circuit, and a new lawsuit filed by a founding partner of the COTA project, leave the planned MotoGP round’s future in doubt.

Proposed Circuit of the Americas in Austin  Texas. The plans to host MotoGP in 2013 have fallen into doubt during legal wranglings.
Plans to host MotoGP in 2013 at Austin’s proposed Circuit of the Americas have fallen into doubt during legal wranglings.

The COTA circuit is embroiled in a legal conflict between its owners/investors and former partner Tavo Hellmund, the man credited as principle driving force behind creation of the Austin racing venture. On March 1, 2012 Hellmund filed suit against COTA and its principle investors, Red McCombs and Bobby Epstein, in the Travis County District Court. The suit seeks $18 million for Hellmund’s claimed 20.58% stake in the company, as well as claims for the $500,000 annual salary promised in a 10-year work agreement.

COTA ran into controversy last year over its Formula 1 contract. Construction on the circuit was stopped, and Hellmund deemed in breach of contract. COTA’s investors then forged a new contract with F1 boss Bernie Ecclestone independent of Hellmund. The rescheduled F1 race is now on tap for November of 2012.

While the F1 contract was re-negotiated, the status of the MotoGP race isn’t clear. A recent report by Austin’s Statesman indicates the issue is far from resolved. The Statesman quotes a letter sent in February from Kevin Schwantz to COTA CEO Steve Sexton, in which the former GP champion urges the circuit to obtain the rights to host a MotoGP race in Texas from Hellmund.

When the Austin MotoGP round was officially announced in April 2011, the principles cited as signing the 10-year deal with MotoGP rights-holder Dorna were 3FourTexasMGP and Full Throttle Productions, promotion companies owned respectively by Schwantz and Hellmund. In Hellmund’s suit against COTA Schwantz is identified as the “the holder of the rights to MotoGP racing in Texas”, with Hellmund having “secured rights to host Formula 1, V8 Supercars Series, and MotoGP races in Texas.”

If an agreement is not reached, the Austin circuit may not host the third US stop on the 2013 MotoGP schedule. (MotoUSA has submitted inquiries to COTA and Dorna regarding the current contract status.)

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