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Issue link: https://magazine.cyclenews.com/i/127986
Edmondson
Continued from page 17
says Roger owns this, we owned that.
But as soon as they saw this wa~ a legal
case, and it was going to trial, they
adopted the stance tha t you can't own a
class. And I said to them all along, forget
about that issue. I had a business relationship. I had a joint venture. They
would not ever, not one time in the trial,
refer to the joint-venture contract as a
joint venture. Th~y referred to it as an
administrative agreement. They wrote
the contract. ['ve learned some legal
principles. One of them is that the people who write the contract are responsible for the ambiguities. There'.s nothing
ambiguous about this - it is a joint-venture contract, it says so at the top. Down
in the terminology it says this is a jointventurE; contract, not anything else, and
it goes through all this stuff. They called
it an administrative agreement because
calling it a joint venture didn't suit their
theory of defense. This is one of those
examples of why they didn't win. So that
was one of the problems. We had a jointventure contract. There was no question
about it. We had a sanctioning agreement. In signing that sancqoning agreement, they reached out and tried to say
that sanctioning agreement was jointly
developed and therefore was theirs. One
of the questions nobody answered was,
"If it was yours, why didn't you sue him
for stealing it from you?" It was never
theirs. They never wrote one check, they
never wrote one dime. "You can't own
classes," is what they said. One thing
they never did understand, because I
said in my deposition, "If I announced a
new supersport class tomorrow, would
you sue me and say it was yours?"
Absolutely not, but that's not what the
AMA did. They took the one that I ran
that had a history and records. This is
really a matter of a difference of opinion,
this is a matter about as close as you can
get to a criminal case in a civil court. L
accused these people of stealing from
me, I accused these people of defrauding
me, I accused these people of predatory
practices in destroying my business, and
they did everyone of these things. That's
why they lost. Not because my guys
were slicker, or I was more attractive or
anything else. I'm not a Southerner. I
live down South. Nobody's ever going
to accuse me of having a Southern
accent. I was raised in the Midwest. But I
think it was a cumulative thing. I think
probably, once the jury made their mind
up, that our side was to be believed and
the other was not, which was quite easy
'after Youngblood's testimony. We called
him as our last witness. He was caught
and embarrassed time after time. And
the next day they called him as a witness
and we caught him lying again. My guys
told me something I'd heard before, and
they said once we wrap our case, our
case will never get any stronger. Well, it
did. Because the AMA guys kept trying
to torture these documents.
My lawyers sent them a letter in June
offering to settle for $2.7 million. They
said, "You know, we could probably do
this AMA/CCS thing, there's a potential
to do good things over _here, but if you
don't, bad things are going to happen
over there." What's the judgement? $2.7
million and all the bad things we talked
about, including airing it in the press. I
hope I don't sound cocky. I don't mean
to. I'm really very humbled by this
because I saw the potential for. the promoters in the weekend, and I thought of
all the advantages we brought. We
showed them ways to do business. They
were making money on road racing;
they'd always lost money. Until that
joint venture, they'd always run road
racing in the red. I felt sure that they
wouldn't do this.
QShOuld the AMA be in pro racing?
RASOR
&
HARRISON
No. That's not their
The
A biggest thingpraise thefunction.for, is
they've got, you look
at what people
AMA
Continued from page 19
required to go to the appeals court, we
have to post a bond which essentially
those AAA functions. I said it five years
ago to Youngblood, I said it seven years
ago, I said it four years ago. I'll say it
again, I'll probably say it till the day I
die. Now, they can prove me wrong.
They haven't proved me wrong yet. I've
digged through a lot of carcasses and a
lot of vice presidents. Probably they
couldn't do what they needed to do. The
. tools aren't there, the economy's not
there. Right now they have this incestuous relationship between the AMA and
all these people in the industry that
needs to be taken over by a Bernie Ecclestone type, or a company that has that
same mentality. I'm not trying to praise
Ecclestone - I don't know enough about
him. And I'm not thinking about the
operational side. Can the AMA operate
road races? Sure. But they can't operate
the sport. There's a difference. The races
aren't the sport.
(Because of developments that occurred
after the interview, we spoke with Edmondson again, this time in the Benny Kahn
press room on March 6)
The AMA has in fact filed a notice of
appeal along with a bond. We objected
to the bond as being inadequate both in
terms of amount and in terms of form,
and I can't give you all the details, but
there are several elements that go into
making a totally secure bond, and this
bond didn't meet it. So we objected to it
and, on Friday, the judge, Judge Thornburg, he upheld the objection of the
bond and he turned down their request
for stay. When they filed all of this, they
automatically asked that in the event the
bond wasn't acceptable tha t they be
allowed a stay of execution, so to speak.
And he denied those. So they now have
to go back and redo the bond and in the
meantime we're proceeding forward
with collection activity. There's been no
good-faith settlement offers from them
at this point. You know,.I asked the
question, "When do we formally ask for'
the money?" The legal interpretation is,
you asked for it four years ago. It's not
like if you owed me money on a car, y.ou
get a legal demand and then they repossess. Tftis is one of those situations
wher~ the whole process has been that
demand. So we're exerciSing our rights
and moving forward with the collection
process. I think (the bond was) $170,000
short on the amount of dollars, but I
don't think tha t was the primary problem. I think the primary problem was
that it was a very shoddy piece of legal
work, is the way it was described to me.
For example, there was a power of attorney that wasn't signed. There were - out
of the five essential paragraphs that this
type of case requires in a bond, it only
had two. It appeared to be, according to
my attorneys, just shoddy workmanship.
says, "Yeah, we've set aside, we've
made positions to pay this settlement if
we're not successful on appeal." And
, that bond, like any other bond, assures
Roger that the money is accounted for
or available in the event we do lose. So
we've done that by securing the bond
with association investment from
retained earnings and by the acquisition of an insurance policy which is
posted with the court. And that bond
has been, as I understand it - the bond
and the security for the bond - has
been approved by the board in both
amount and in form, as 1 understand it.
We believe, I guess, that we're making
wise decisions about protecting our
mem~rship and association's interests
while meeting our legal obligations to
secure this judgment that we suffered
at the lower court level. That's a longwinded ans~er. Sorry.
NOW you're in the appeal process,
which could tak,e 18 months?
No, as I undersfand it, in the Fourth
Circuit Court, typically eight to 11
months, that was the term. There is no
appeal yet. All there is is a notice of
appeal, which means it's 1lne of those
things they !lad to do or they couldn't do.
So they've spent maybe $10,000 so far,
and now they have to decide whether to
spend another $200,000.
CIII
Q
A
g
BefOre this litigation, there were
offers to be actually bought ou t
be ore there was any settlement talk.
RR: To settle the dispute, it was
my understanding that a financial
offer was made.
A
Roger contends that the discrepancies were very minor, that the
A A wasn't being as flexible, that it
seemed to him that they would have
been willing to litigate.
RR: [guess the information that I
have suggests that we believe
that, under the contractual agreement
that we had with Roger, first of all,
we didn't believe that we owed him
anything in the separation, 1 guess. In
the interest of trying to settle the dispute, we were making a financial
offer which was rejected. And I guess
from our perspective we didn't think
he was as sincere perhaps in his
desire to try and bring this to closure
'as we felt.
GH: We'll all wait and find out in
the a ppeals court. 'Fha t' s the bottom line.
A
A
What's'the time
on
Q GH: The first step isframe the .the
next step?
to ask
curA rent judge torarely happens. decireconsider his
sion, which very
the
If
judges says, "No, I'm not going to
overturn my own decision," then we
move to the appellate level, which goes
to a federal district court in Richmond,
Virginia. It's a three-judge panel. The
AMA's been in this position before in a
lot of government-relations issues,
where we lose in a lower court and we
appeal to a higher court.
Will the interest
Q GH: honestlyoriginalcontinue to
accrue on the
judgment?
A
don't know.
When it was
was
Q $2.96 fees ofadjudicated, it like
million, plus Roger's
lawyers'
something
so many significant developments in a
long period of time.
But financially, this would be the
biggest hit the AMA's ever taken
in ltigation?
GH: Well, that's based on the fact
that we're going to lose in appeals
court, which we don't think will happen.
A
But does the meter continue to
run on the money throughout the
entue appeals process?
RR: I don't know the correct·
answer. I do know that because of
the way the bond is structured, investments that the association has secured
the bond with continues to accrue
interest with the association. So from a
financial perspective from the association, it's been described to me as relatively invisible. We've provided for the
payment in the event we lose,. because
we were able to use securities, and we
continue to draw interest on those. Our
investments continue to draw interest.
GH: We're making money at that
level, and no money has been
exchanged with Roger yet.
I know that the clock continues to .
tick from the day of judgment until
today. And I didn't know if it stopped
when the appeals process starts... and
there's interest on the money not being
paid.
Q
A
A
Does the appeals process
Q involve your having to payalso
his
lawyers?
RR: Like everything else, the
ttorneys' fees is
the
A of aprocess. Also, therepart ofissue
appeals
is the issue
regarding interest, which we would
argue at appeal shouldn't be paid. As
it stands right now, interest would
accrue in the event judgment is upheld
on a ppeal. It would accrue on the fees
as well as the judgment.
.
GH: Candidly, I don't know about
the fees. I know that it does accrue
on the judgment. Presumably, the
whole issue of fees both at the lower
court and the appellate court would be
at issue, so the fees would be involved.
A
Even if the AMA wins, the
AMA's legal fees are expected to
su stantial. Will this be public
record, since it's a not-for-profit organization? My understanding is that
it's around $1 million now.
RR: Technically, it's probably not
a matter of public record. As to
what the~actual amount is, I don't
know. You may know more than I do if
that's what Roger's telling you.
A
I guess I'm mistaken - in a notfor~profit organization, aren't the
boo s open to the members for operating costs?
GH; Sure, it's included in our
annual report. There's ongOing
legal fees with the AMA that we can
anticipate, like any company involved
in motorcycling. I mean, there's litigation going on at different levels all the
time.
A
I
$400,000. Would it be fair to say this is
the toughest battle the AMA's ever
had to fight?
GH: I don't know. In 75'years,
there's been an awful lot of tough
battles. I think we've learned from all
those battles. We won some, we've lost
some. 1 think we've learned each and
every time. I wouldn't know how to
characterize this, because there's been
A
I
~:;:!s~a:~, tt:;r~~l ~~:~~~~~I
of ow this comes out?
RR: Oh, sure. Lawyers are expensive. We all know that.
GH: But they're a part of daily life,
unfortunately.
..
A
A
:iii
Q
IS the AMA currently in litigation with PACE Motor Sports?
RR: Yes, we are, as a defendant.
.1"'\.. The issues are really about who
owns certain trademar}