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IndyCar will help pay back tickets for scrapped race

Boston officials examined an IndyCar mock-up following a news conference last May.MICHAEL DWYER/ASSOCIATED PRESS

IndyCar racing will provide $925,000 to ticket buyers still waiting for refunds from a planned Boston race that was canceled in April, according to an agreement with Attorney General Maura Healey announced Thursday.

Healey also filed suit Thursday in Suffolk Superior Court against Boston Grand Prix LLC, the local company that proposed the race, and the company’s manager John Casey, seeking additional money to fully refund the remainder of the roughly $1.67 million owed to ticket holders.

“Boston Grand Prix and [Casey] knew full well when they marketed and sold this event that they didn’t have the resources or permits to make it happen,” Healey said in a statement. “They failed to protect consumers, and we will do all we can to hold them accountable.”


Lawyers for Boston Grand Prix and for Casey could not be reached for comment Thursday.

The inaugural Grand Prix of Boston was planned for Labor Day weekend, on a 2.2-mile temporary street course around the Boston Convention & Exhibition Center. About 4,000 people bought tickets to the event before race plans collapsed in late April. Some customers received refunds, court filings suggest, and others successfully initiated chargebacks with their credit card providers to remove the ticket costs from their accounts.

The attorney general’s office will determine which ticket buyers are still waiting to be repaid, and then decide how to disburse the money provided by IndyCar, the sanctioning body of the sport, said Healey’s spokeswoman, Cyndi Roy Gonzalez.

Healey praised IndyCar for becoming “a productive part of this solution.” IndyCar, in a statement issued Thursday, confirmed it was “stepping into the breach left by promoter Boston Grand Prix” and contributing money toward refunds.

The attorney general’s lawsuit accuses Casey and Boston Grand Prix of selling tickets and spending the proceeds when they should have known the race was in trouble.


“Rather than cancel the race when they knew the venture was insolvent and that they had not secured all necessary permits, BGP and Casey accepted the deposits from consumers and provided a written guarantee of a full refund in the event of cancellation,” the lawsuit states.

The race promoters did not hold ticket proceeds in trust to ensure refunds would be available in case of a cancelation, and instead drew from the proceeds to pay mounting event costs, according to the lawsuit, leaving just $400,000 for refunds when the event was scrapped.

Healey continues to investigate to determine where the ticket proceeds were spent, her office said.

An affidavit filed in the case says one of Healey’s financial investigators found $55,000 in checks written from Boston Grand Prix accounts to Casey in the three months before the race was canceled, and $175,209 in checks between June 2015 and April 2016 to Casey Summit LLC, a company managed by Casey.

“Many of the transactions listed in BGP’s bank records through April 30, 2016, totaling tens of thousands of dollars, appear to be of a personal nature,” wrote investigator Shannon Roark. She listed as examples: transactions with ticket broker StubHub, the clothing store Vineyard Vines, Sirius XM radio, the on-line store of electronics retailer Best Buy, and Stop & Shop supermarket in Danvers.

Boston Grand Prix, LLC filed for Chapter 7 bankruptcy on Tuesday, claiming about $9 million in liabilities, and remaining assets of $10,900 in cash and two cars worth $50,000, according to the bankruptcy filing. The company also declared among its assets fees it was trying to recoup, including $487,500 paid to IndyCar under a race sanctioning agreement.


Boston Grand Prix has said through its lawyer that the company ran out of money after returning $400,000 for refunds, and has repeatedly insisted it needs an influx of cash to complete the reimbursements.

Boston Grand Prix faces several legal actions in addition to Healey’s complaint.

The Boston engineering firm Howard/Stein-Hudson Associates, Inc. has sued the Grand Prix, claiming to be owed $446,096, plus ongoing interest, for “thousands of man-hours” of work performed under contract. A former sponsor of the race, Global Partners LP, has sued Boston Grand Prix in Essex Superior Court. Boston Grand Prix’s bankruptcy filing says Global is owed $275,000.

The company is also being sued by IndyCar and by MassPort, according to court documents.

Car dealer Herb Chambers has threatened to sue over $100,000 in lost sponsorship money.

Eric Moskowitz of the Globe staff contributed to this report. Mark Arsenault can be reached at mark.arsenault
Follow him on Twitter @bostonglobemark.