Cycle News - Archive Issues - 1990's

multiple parts down there. rt was unanimous, not only on the six jurors, but the two al tern a tes were also allowed to vote. All eight of them found for us. We were gratified with the result. Their post-trial motions have all been denied. Their attempts to screw with me in the bankruptcy court have now been brought to a halt by the bankruptcy court. That story is a very simple one. They bought a claim for $3000, which gave them standing in the bankruptcy. QDid you owe them $3OOO? A-I didn't owe them $3000. Now I do .t"ilegally owe them $3000. If lowe it to you and you say, 'Hey, look, I'll sell it to you for $500: If' somebody bought it, f'd owe them $500. It was a legal debt that I had when I filed this bankruptcy. So I filed Chapter 7 bankruptcy first, total liquidation. I carne to realize two . things about the same time. One was, that meant that I wasn't going to be paying these people. I want to pay everybody, everybody lowe money to. Chapter 7 just calls for straight liquidations. Why did you file for bankruptty? Legal fees? A-No, no legal fees. Expenses and try..t-\.ing to run a Pro racing series from the get-go without any help. You've got to understand that it's easier to grow than to downsize. Once you've established yourself at this level, publicly, you've taken on all the accoutrements, all the expenses. I've always believed that if you make a deal, you've got to keep it. It meant that I had to pay all those things whether we had the support or not. Staff, rent, insurance, computer programming, motorhQme payments. All these things are built up for a certain level of performance; (if) you've got to downsize, it's a lot easier to sell a used car than a used motorhome. Especially if you've mortgaged your soul on it and you're upside down. We've all been upside down. I was upside down on that motorhorne. So the cash flow just went. If somebody would've looked at our credit report, they would never have found a late payment. We were perfect, and we were paying for it. But we reached the end of the road. Okay, the handwriting's on the wall. We're going to start breaking commitments here if we just don't do something. We just reached the point where I couldn't do it, I couldn't do any further. Coincidentally, the IRS came to see me the next day, wanted to seize this house I just got. I had a dispute going with them for several years. But we'd made an agreement, and I was supposed to keep making monthly payments. When my income stopped, I had to go back and say, 'Guess what? I don't have any money now, I've already obligated to this, thal, and the other, but I've got this lawyer, it may take a few months, but I'll be able to pay you.' So they got impatient and wanted to seize the house. Q What was your dispute with the IRS? A-It had to do with travel expenses ..t-\.and whether or not we should be taking depreciation on the motorhome or whether or not they would count it as a separate, second horne. Unfortunately, our CPA firm wasn't consistent, and I got busted. It started out like a $66,000 issue, now it's more like $70,000. But they did waive the penalties. At any rate, the AMA bought this claim and, as we were going into bankruptcy, I converted from Chapter 7 to Chapter 11, which meant that I could make payments to people; but they couldn't corne after me. What we know now, and we Q didn't know then, they were trying to keep it open in case they lost the case, figuring they could go back into bankruptcy court and do w)lat's called a clam down, which they attempted to do. Right after the judgment and the attorneys fees were all set, two weeks ago the AMA went into court and tried to get us, through the bankruptcy court, to accept $920,000, which would payoff all the creditors and gi.ve my attorneys about $250,000. It would give me nothing. In their defense, trying to stop the attorney's fees thing, they said to the federal judge, "Here's proof that we're still trying to settle this case," and he cited it as inadequate. It's not in good faith. Our la wyer wrote a letter back: "Look, you're offering 26 percent, not of what you might get hit for, but what you have been. We're not unwilling to talk, but we've got to get some reasonable offers." Yesterday (February 26), they caine up $10,000, to $930,000. I instructed my attorneys to execute the judgment. I'm not being aggressive. In spite of all this history, if somebody from the AMA had called and said, 'Let's sit down and talk: I would've been willing to have .given them terms. I would even, under the right circumstances, if I was convinced there was a new direction at the AMA, (have been willing) to go and put in an extension. At what you decide Q against it? point didgot until next A-Yes·terday. They've rtFriday (March 6) to determine whether or not they're going to appeal. I can't negotiate with myself. If there's nobody there who can make a business decision, then maybe we should try to find a softer landing spot. than having this guy come in and take motorcycles out of the museum. Which could hap" pen. It's going to sound threatening, and I don't want it to seem that way. I don't mean to sound that way. But the fact is, they owe me $3 million, and the judgment's getting bigger every day. At some point in time the whole thing is over. What are they going to do? Somebody with a business head ought to be saying, "Maybe we should see if we can get payments out of this guy, maybe we should talk about areas where our companies can work together, maybe we can put this misunderstanding behind us." Maybe we can. But nobody there can make that decision. They're continuing down the same path. Even though the law firm up there may be gone, John Hasty's still operating in orth Carolina and a $10,000 increase is probably as good an insult as they could make to that judge and to my lawyers. If they decide to appeal, they'll be an additional year or so. But the judge has to finds grounds to appeal? A- All of these issues are the issues rtthat can be brought up in appeal. The judge dismissed many of them as being without merit. But the evidence is over. Nobody wants to talk .anymore about whether so and so told the truth or didn't. It's all a ~atter now of whether or not Judge Thornburg, in his rulings, allowed in things he should not have a!lowed in, or did not allow things he should have. I can tell you that about' halfway through the second day, virtually every objection the AMA made was sustained, and almost every' one we made was overruled. All of them. It was clear. I didn't know at the time. I was upset I asked my attorneys, "What is. going on here? Have we done something to offend the judge?" And what they told me is that he sees how the testimony is going already and believes at Q this stage that we're going to prevail. And as a result, he's making sure that the record is clean in terms of things that the AMA can appeal. Apparently, this is typical. I didn't know that. So I'm, at this point, very gratified that eight people - an electrician, a beautician, a music teacher, and a computer programmer, a woman whose husband owns a body shop, a housewife, a college professor - they wouldn't know what we were doing here, they wouldn't know a superbike from a motor scooter, and they sat there and listened to all these things, and we're gladdened by that. They may not have understood all the technical aspects of the issue. They understood right from wrong, and they knew when they were lied to. Q Why did your side win? A-Well, first of all, we had the facts on ..t-\.our side. Just from a simple standpoint, what we said happened, is what happened. Second, we presented it in an easy-to-understand manner. Because every document that we put out was allowed to speak for itself. The other side, every document that was btought up, you had to torture what it said or eliminate or ignore what it said in paragraph three to get what you wanted out , of the paragraph. It was just incredible. It was consistently like that. Ed tried to tell the jury tha~ the reason this all started was that they got too many complaints about my motorhome and my Rolex. And as a result they felt that they needed to bring the program in house and set me aside. I was living too high a lifestyle and I'd become aloof. At the board meetfng, he asked the board to give me a three-year management contract. They asked him why he was going . to pay me a lot of money. Who else made that kind of money? He couldn't answer that. He suggested the board give me half the AMA road race profits for five years. He suggested the give Q years... AMA roadboardprofits. you half the race for five . .and contract. three-year minutes. manageA ment give me a From thewas overThis isn't something tha t heard. This is all written stuff. You asked me why we won? We won because we produced facts that people could see for themselves. It didn't require that they have a lot of confidence in me or the next witness: It was simply here's what happened and here's what's proven. The other side . was continuously backpedaling. In the case, John Hasty was reading from a contract; they asked him questions, he changed the words. Ron Zimmerman; who was the former vice president of racing under Youngblood, Maxwell's predecessor - here's a guy reading from a contract, and he's trying to get an answer out of Ron, and he was changing things to get an answer he wanted in court. And he got caught. It happened with both of them, Ed Matto and John Hasty. Matta kept trying to say that the contract that I had with the AMA to start CCS called for us to blend .our assets. And he brought this word "blend" up about half a dozen times, and I finally had to say, "I don't find the word in the contract. Can you show me where it is?" Well, it wasn't there. And of course the jury looked ateach other. What was this guy doing? It became obvious after a while that they didn't have the facts. When I made that $3 million lease offer, I had dinner that night with (AMA director of competition) Merrill Vanderslice, and he told me tha t if the AMA took us upon this, then we were going to have an opportunity to put our money where our mouth was, and perform, and that, trankly, I was going to have start recruiting some good people, would he be interested in going to work for us? Merrill got up and testified tha t I tried to hire him away from the AMA to create my OWll takeover of road racing. So, was that a lie or his perception of it? Did it leave facts out? Of course it did. I think that's what turned this case for us. These eight people didn't know, they didn't know Ed Youngblood, they didn't know the AMA. They got a story presented from us in a straightforward manner that was backed up by the documents. They got a story presented by the AMA which wasn't backed up by the documents. Every witness that I had was there to tell '!. story. Every single Witness that the AMA had, except for the first guy that showed up and showed some slides about what the AMA was all about, some kind of road rep or sOI?ething, everybody else was on the AMA Pi!-yroll. Every single witness they had was getting paid to be' there. We won because we were right. We're still right. would be your ideal resolution? Q What would make sense. First A-What 01£, ..t-\.having had to go through all of this, I'm not prepaJ:ed· to compromise. We won it - we won it fair and square. As of right now the number is three million, three hundred and some thousand dollars. I don't know what it is. It 'changes every day. I'm not willing to compromise. I might corne off it a tad, but I don't see any reason to do it. If they want to write a check for the whole amount, yeah, we could probably compromi~e a small bit. I think they probably don't want to do that. The AMA is doing well,. but they're not doing that well. I'd think they'd probably prefer to have terms. I don't even want to talk terms'. If you run a business, you'd much rather run a business where you can control your cash flow than when you certainly have 25 percent of your assets t;!ken from you. J think that would be a smart business decision to make. Secondly, if I really believed that this time the AMA was going to be as I described it - a benevolent custodian of the sport and not a predatory monster I think the AMA could use CCS, and I frankly think CCS would benefit from being involved with them. But that would be something to talk about. long term? " What about keeping CCS Are you Q planningas well as NASB. It's what on going? A-Oh, sure, ..t-\.it was designed to be now. It's taken us this long to get there. r don't Fun a single NASB program where the class isn't sponsored. It's not reasonable that I would take money away from CCS to create a handful of pro races. There's no need at this moment. There's not been a big-enough market for two big pro races. I'm not saying there can't be. I still believe there's somebody, I'm not saying who,'but r believe there's somebody out there who could take this sport and make it what it ought to be, and I don't believe it's the AMA because of their structure.' I don't think they've got the wherewithal, the mentality, the personnel to do it. But I think there are some entertainment companies that can do it. Did they claim that they owned the Supersport and Harley classes? A-They didn't claim that. They ..t-\.claimed you can't own a class. Of course, (in) Mr. Youngblood's memo he Q Continued on page 43

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