2nd investor files action against Grand Prix

Daily Record Business Writer//August 16, 2011

2nd investor files action against Grand Prix

By Rachel Bernstein

//Daily Record Business Writer

//August 16, 2011

A second early investor of the Baltimore Grand Prix filed an action Tuesday against the race’s organizers, seeking more than $300,000 he said he is owed.

And the attorney for Sean Conley and fellow investor Steven Wehner — who filed against the organizers last week — said he will be filing an injunction to freeze part of the money from advance ticket sales sitting in an escrow account.

Conley filed what is known as a confessed judgment Tuesday on the $313,250 owed him under an agreement in which he sold 5.2 percent of his 10.2 percent ownership.

Wehner, who Conley said asked him to join the organization to bring racing to Baltimore, filed his nearly $750,000 complaint against the race organizers Aug. 11.

According to Wehner’s complaint, Baltimore Racing Development LLC was to have paid the Rodgers Forge resident $575,000 over five years to purchase his 10.2 percent interest in the organization.

Both filings claim that BRD has defaulted on its payments. Attached to the filings are exhibits of the agreements between BRD, Conley and Wehner from May 12, 2010.

Wehner and Conley’s attorney, David B. Shapiro of the Law Offices of David B. Shapiro in Baltimore, said that to ensure his clients are paid, he will file injunction in the upcoming days. The injunction will request an emergency hearing and a freezing of the BRD’s escrow account for advance ticket sales.

“They should have over $3 million in advance ticket sales,” Shapiro said in an interview Tuesday. “As soon as that money is released, before it’s gone, immediately a portion will go to pay Wehner and Conley.”

The agreements between BRD and the investors outline a payment schedule in exchange for their ownership shares. The agreements also state that BRD will pay attorney’s fees of 15 percent of the total amount due, any accrued and unpaid interest, the full unpaid amount of the purchase price and court costs.

That would come to $1.2 million between the two parties, according to the Baltimore City Circuit Court filings.

Shapiro said that discussions between his clients and BRD had been going on for months, and while lawyers had been involved in more recent discussions, the situation came to an impasse.

“The race is coming up at the end of September,” he said. “Both are owed monies now. Both signed in selling their interest.”

Jay G. Davidson, CEO of Baltimore Racing Development, did not respond to repeated attempts to contact him by phone and email.

Wehner also could not be reached for comment.

Darlyn R. McLaughlin, listed as attorney for Davidson and BRD, stated in Conley’s filing that she agreed with the claim and said the money owed to Conley should be entered by the court as a judgment.

McLaughlin, a Baltimore-based solo practitioner, declined to comment on the case Tuesday.

BRD was to have paid Wehner $8,000 by May 5, 2010, which included $7,500 for consulting and severance. Conley was to have been paid $500 by May 14, 2010, and $18,250 by Dec. 5, 2010. Wehner’s second payment of $49,500 was also due Dec. 5.

According to the contract, Wehner’s next payment — of $105,000 — isn’t due until 10 days after the Labor Day weekend race. Conley is to be paid $60,000 at that time as well.

The rest of the installments would also be paid within 10 days of each race from 2012 to 2015.

“I have two kids in college,” said Conley, a real estate broker in Martha’s Vineyard. “That $18,000 was going to be useful. If they weren’t going to pay me the $18,000, they weren’t going to pay me $60,000. That’s why I filed it now.”

Conley said BRD did pay him $5,000 in March, but he has received no further payments.

It is unclear if Wehner has received any of the scheduled payments.

The agreement defines default in payment as failure to make payments from 2010 to 2012 within 60 days. For payments due during 2013 through 2015, BRD would have had 15 days.

Wehner, according to a recent story by The Baltimore Sun, was vital in talking to IndyCar officials, city and state leaders, to bring the Grand Prix to Baltimore. But, according to the story, after the contacts were made and as the event moved from the proposal stage toward reality, Wehner relinquished his leadership role to Davidson by February 2010.

“The timing is just awkward,” said Baltimore City Councilman William H. Cole IV, who represents the area where the Grand Prix will be held. “I certainly know what Mr. Wehner has brought to the city, and there are obviously a lot of issues at play. But none of it impacts the ability to deliver the Labor Day race. BRD is still capable of delivering the race, and they are.”

While many races in other cities — St. Petersburg, Fla.; Long Beach, Calif.; and Toronto, for example — have title sponsors, Baltimore’s Grand Prix does not.

And last fall, organizers had requested more time from the Maryland Stadium Authority to make bond payments to create the $1.9 million pit lane at the parking lot at Oriole Park at Camden Yards. Construction had been delayed on the pit row because of a design change, so organizers pushed back the payment that was originally due Oct. 1 to Nov. 30.

“With all these different folks coming forward to make various claims against the organization, it’s unclear to me where that money’s going to come from to pay all these people,” said Dave Troy, a Baltimore entrepreneur and software developer. Troy has been spearheading a petition to hold BRD financially responsible for a tree restoration plan in Baltimore.

The three-day event at the Inner Harbor, scheduled for Sept. 2-4, is expected to lure 100,000 visitors and $70 million into the area.


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