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Boston Grand Prix files for bankruptcy, owes $1.67m to ticketholders

Boston Grand Prix, the local company besieged by lawsuits since its plans for an IndyCar race collapsed in April, filed for bankruptcy on Tuesday.

MICHAEL DWYER/ASSOCIATED PRESS/File

Boston Grand Prix, the local company besieged by lawsuits since its plans for an IndyCar race collapsed in April, filed for bankruptcy on Tuesday.

Boston Grand Prix, the local company besieged by lawsuits since its plans for an IndyCar race collapsed in April, filed for bankruptcy on Tuesday, claiming almost $9 million in liabilities, including $1.67 million owed to ticket holders who were never reimbursed.

The remaining assets of the company total a paltry $10,900 in cash and two cars worth $50,000, according to the bankruptcy filing.

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The company also declared among its assets $586,000 in fees it paid out and is trying to recoup. The fees went to the Massachusetts Convention Center Authority and to the national body that governs IndyCar.

“While BGP has taken this action because it has no other choice, it is still an action that is taken with deep regret,” the company said.

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The bankruptcy filing lists about 90 pages of ticket buyers, most of whom had not been refunded. It includes more than 4,000 names. Buyers with more than one transaction appear to be listed multiple times.

Bankruptcy lawyer Mark Powers of Bowditch & Dewey, a specialist contacted by the Globe, said the ratio of assets and liabilities are bad news for ticket holders still awaiting refunds.

“Based on the numbers, unfortunately, it looks like ticket buyers will have a hard time getting their money back,” Powers said.

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Boston Grand Prix has been under investigation by Attorney General Maura Healey’s office over money still owed to people who have not been reimbursed for their tickets, some of which cost up to $205 each, according to figures the Grand Prix released in March.

Healey has threatened to sue to recover ticket money and last week formally notified Boston Grand Prix, the company’s manager, John Casey, and the national IndyCar governing body that they may face litigation.

“Boston Grand Prix’s bankruptcy filing today does nothing to prevent us from our continued efforts to find out where the money ticket holders spent has gone and to aggressively pursue a refund for those consumers,” Healey’s office said Tuesday evening in a statement. “We will continue to seek information from all parties involved and take whatever action is necessary to get the money back for those who purchased tickets.”

Boston Grand Prix has said it ran out of money after returning about $400,000 in refunds. It has repeatedly insisted it needs an influx of cash to complete the reimbursements.

“It has become clear that a full refund will not be possible without the cooperation of third parties, including IndyCar and others who have been unwilling to participate,” Boston Grand Prix stated Tuesday. “BGP hopes that the present [bankruptcy] filing may provide a forum for an orderly disposition and administration of claims to provide as full a return as possible to the ticket holders and all other impacted parties.

Boston Grand Prix announced it had filed for Chapter 7 bankruptcy, which provides for the liquidation of assets to pay creditors.

The list of corporate creditors includes former sponsors of the race, such as Bridgestone Americas Tire Operations, owed $223,500; Jennings Road Management Corp., owed $100,000; LogMeIn, Inc., a prominent sponsor that was in for $390,000; and MillerCoors, owed $105,000, according to the filings.

Another sponsor, Global Partners LP, has sued Boston Grand Prix in Essex Superior Court. The bankruptcy filing says Global is owed $275,000. Billionaire car dealer Herb Chambers has threatened to sue over the $100,000 he paid in sponsorship money.

The company’s business debts include $45,000 to Delta Airlines, $4.2 million to the national IndyCar body, $74,640 to Party by Design of Avon, and $35,947 to the law firm of Rubin & Rudman.

The Boston engineering firm Howard/Stein-Hudson Associates Inc. filed suit against Boston Grand Prix, claiming to be owed $446,096. Boston Grand Prix’s bankruptcy filing lists a slightly lower amount.

Boston Grand Prix is also being sued by IndyCar and MassPort.

The Grand Prix lists a possible counterclaim against Howard/Stein-Hudson as a potential asset, as well as a claim for tortious interference against IndyCar.

Within the last year, according to the bankruptcy filing, Boston Grand Prix paid $423,000 in “salary and consulting” fees to Casey Summit LLC, a company managed by John Casey; $130,624 to Mark Perrone, the former chief executive of the Boston race; $166,000 in “compensation for consulting services” to NZR Consulting Inc., an Indiana motorsport expert; and $123,000 to CK Strategies, the consulting firm run by Chris Keohan, a former campaign adviser for Mayor Martin J. Walsh.

Adam J. Ruttenberg, a bankruptcy expert with Posternak Blankstein & Lund, reviewed the filing Tuesday night and noted that creditors will meet with a court-appointed trustee in the case in August. The trustee’s job is to turn the company’s assets into cash and distribute it to the creditors in accordance with the law, he said.

Race organizers in 2015 signed a five-year deal with Walsh to hold the race in the Seaport District over Labor Day weekend. The race was planned for a 2.2-mile temporary street course around the Boston Convention & Exhibition Center.

Tickets went on sale in March, but the race was canceled in late April, amid finger-pointing between promoters and the city. Casey accused the city of making unreasonable demands. The city in return said the promoters were disorganized.

Cody Butler of Quincy bought tickets to the event and is still waiting for his money back. He is listed among the creditors, owed $570.

“It’s terrible they were allowed to sell tickets in the first place,” Butler said.

He believes the city and the sponsors who provided credibility to the race should “have some responsibility — anyone who allowed them to move forward.”

Mark Arsenault can be reached at mark.arsenault@globe.com. Follow him on Twitter @bostonglobemark
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