Cycle News - Archive Issues - 1990's

Continued from page 15 was okay because we hadn't heard _anything. Later that day, I gather there was some communication, albeit very difficult to read, that arrived suggesting there was a problem with the bond and it was subsequently determined that the bond was objected to by Roger's attorneys and the judge accepted those objections. My understanding is that the objection revolved around a signature on the bond. We know that the bond was properly signed. Either the judge saw a copy that he couldn't witness the signature, didn't see the signature or didn't bother to look, I don't know which. There was a question as to whether the bonding company accepted the jurisdiction of the court. It's my understanding that the local rules of the court stipulate that the court has the jurisdiction, and it's not necessarily incorpora ted in the bond. But, nonetheless, the objection was accepted. So, it's accurate to say that the bond was rejected initially by the court. Subsequently we filed a motion for reconsideration of the bond and simultaneously put in motion the necessary steps to make the bond acceptable to Roger's attorneys. As we sit here today (March 11), I know that the motion for reconsidera tion was presented to the court. I don't believe any action was taken on it. A new bond application is presented to the court. All of the objections they previously raised ha ve been met. The assurn ption here is tha t the court and Roger's a ttomeys will now find the bond acceptable. As we sit here and speak, there is no lien on our property. . was there ever a lien on the property? Q A- RR: There has never been a lien on .L-\.our property. H~ did not exercise the judgment, and it's my understanding, how I'm informed by the a ttorneys, that there is no lien until the judgmen t is exercised, and they haven't done that and they can't do that yet. One of the issues that Edmondson talked about was that the A A bought a claim against him in bankruptcy court. RR: As I understand it, as it was explained to me, Mr. Edmondson filed for bankruptcy after the litiga tion against the association was filed. At that poin t, the bankruptcy court became essentially the venue for the control of the litigation against the AMA. For the AMA to be involved and to have a voice and to be noticed on the bankruptcy action, we had t9 become a creditor in that bankruptcy action. As a consequence, we bought, as I understand it, a small creditor out so that we could receive the advance notice we required to essentially remain in control of our o,wn litigation and to be noted in advance for the issues in our litigation. The AMA did not put Roger Edmondson into bankruptcy. That's a very important element that I think has been, as I understand it, misrepresented in some of the press. Through the course of the association's relationship with Roger, really 10 years, we paid him in the neighborhood of about $3 million for his services and, to my understanding, I'm advised that he ended up in bankruptcy court because he didn't pay taxes on the money that he earned in the course of that relationship. And I think it's unfortunate that the two things merge in this, but we have an interest to protect and the only way that we could do that was to become a creditor in that A I I U ~ Q . 8! 18 bankruptcy action, because it has central control over our litigation. wasn't a Q kicking aasguyway of basically while he was down? RR: done to protect the of and memA interestswasthe AMApiece its litigabers in a very significant of Il It tion. It definitely had nothing to do with kicking Roger while he was down. Because that's how he thinks it was perceived, and he thinks that the AMA may perceive it that way also. . RR: It's just not true. Q A Have you retained a different law firm for the appeal? RR: Our counsel remains the same. GH: And that's a board decision as w~ll. They're the ones that are overseeing the original lawsuit and the appeal of the lawsuit. So, if there ever is to be a change, that would be a board decision. And I'm not saying that tilere will be, that's just a board decision. Q A A DO you think that the instability in the pro-racing department brought any of this about? RR: I guess I don't perceive pro racing as being necessarily unstable: Q A The turnover, let's Q position. a lot of say. There's been quite turnover in that . has. I ARR: it'sIitdon't thinkI ithaven'tdon't believe has because, as you know, and no secret, been 0, involved in professional racing on a day-to-day basis. We've got, I think, a very strong and professional operation staffing the pro-racing department, and I think they continue to do a good job. ShOUld the AMA be in pro racing? RR: Absolutely. In some form or fashion, I think pro racing and the AMA go hand in hand. 1 think it's the belief of our board and the direction that they see us.going that it remain in some way related. Q A But do they have the resources to promote it, market it the way that it needs to be done? RR: I believe that the desire and the motivation and the resources are available within the AMA or within Paradama to do professional racing. Q A QDoes Paradama still exist? Yes, A RR: of theit's a subsidiary corporation AMA. It seems to have disappeared. What sort of activities have they done recently? How would I see them at a race? RR: The AMA pro-racing board, which is in effect Paradama's board., still governs AMA professional racing. Q A The y still govern pro racing. And the AMA pro-racing board is, in fact, Paradama's board. GH: They're involved with everything: day-to-day operations, marketing, the entire scope of AMA pro racing. It's a subsidiary of the AMA. It's designed as a separate entity with the goal of paying its own way and making a profit. It's another one of those nondues-income profit centers. It's designed to pay for itself. Q A QAnd A A Q it does make a profit? GH: It did last year. RR: I believe that's true. The AMA's a nonprofit organization. Is there any conflict with Paradama being a for-profit organization within the AMA? RR: The AMA is incorporated as a not-for-profit corporation, but we have elements or our business, of our corporation, that do in fact earn revenue. Greg mentioned magazine advertising. We have a new travel department which is set up to earn a profit, and .as for pro racing, it's a forprofit subsidiaFy. The whole purpose, or much of the purpose, of course, is to generate revenue, generate profit of certain elemen ts. It helps up keep the cost of membership low. ' GH: Like I said e'arlier, half the income comes from non-dues income, not member dues. Half of the income is from membership dues, the other half is from a variety of for-profit operations, and Paradama is one of them. A A Q Who's on the board of Paradama? RR: As we understand it, and we really need to confirm this, because we don't know this officially, but they met today and, as we understand it, it is the existing AMA board plus Paul Dean, Cary Agajanian and Mark Tuttle. So it'd be a IS-person board - that's the way it's configured. A DO they have to decide on every major issue in pro racing? Does everything go through them motocross, road racing, dirt track? RR: I think mo t boards are designed to provide financial and fiduciary leadership for an organization, with the day-to-day operation left to some professional staff. It would be my understanding, the information that I have from our board is, that's the intent of the Paradama board. Part of that process, of course, is that the board il1'!poses the philosophy and direction of the organization as well and the staff implements and carries it forward. Q A At what point did they come into existence in relation to your relationship'with Edmondson? RR: It was incorporated in July of 1993. We were doing business with Roger at that time. Paradama itself sort of existed as a shell corporation, and nothing was really done with it until some time later. We were still doing business with Roger through 1993. They did not file tax returns in '93 or '94, so the corporation was inactive in '93 and '94. So we were still doing business with Roger during 1993 and through some of our discussions with Roger in 1994. Q A So it's hard to say what sort of Q relationshipincorporation had 'on effect that any with Roger? RR: Yes, I think that's fair to say. A say the besthardmy say. of knowledge, let's . To just it'd be to Q Who's Carl Reynolds? RR: Carl Reynolds A boardthe volunteerCarl is the AMA chairman. has come up through leadership program within the associa tion and has served on the board for a number of years before he was elected board chairman about three years ago. mind that our strucA GH: Keep inmemberstheir regions ture is six elected by their representatives in and then the other six are elected from our corporate members and companies and from different levels, from the OEMs down through small mom-andpop organizations and all in between, and they elect six members as well, and that's what makes up our 12-member board. there any way Q much thisjob? of knowing how litigation affected Ed Youngblood's RR: I doubt that had some A impactdon'tobviously.wasitvery much on him. He involved in it, But I think to IS get an honest answer for that, you'd have to ask Ed Youngblood. I wouldn't propose to answer tha t. was he voted out by the board or did he resign? . RR: Absolutely not. One of the . unfortunate things t!:fat was reported, or certainly implied, and I can sit here and tell you to.day that before Ed Youngblood ever went to Indianapolis, prior to o,ur board (meeting), he'd informed the senior staff that he was going to step down. It was my understanding that he had given the board, at least Carl Reynolds, some indication of that before he even informed senior staff. So before he even went to Indianapolis, he made the decision to step down. Q A DO did the board Q RR: you know, no vote taken. actually take a vote of any sort? A There was GH: That's told us. A our board hascorrect. That's what did resign? Has he said Q Wh familyheissues?resigned, aside publicly why he from the fair to he had A GH: usthink it'sago, in asay to step told that he was going down about a year couple of Y 1 years at tha t point - he had not determined when. He wanted to step down as president. He wanted to get more involved in other aspects of the association - specifically the museum, which has been one of his projects. 1 think there's little doubt that this has been an unpleasant experience for him. There's no question. The allegations and the slander that have come up about this I'm sure have taken a toll on him. But it remained his decision to step down. It wasn't demanded by the board, and you can double-check that with the board. And, as Rob said, he notified us at least two days or three days before even going to the board meeting. And down has no Q effecthisatstepping of people who all on the appeals process. There are a lot have speculated that the lawsuit, or a lot of it, is due to a personality clash between Ed Youngblood and Roger Edmondson. By his stepping down, does that change anything? RR: I don't think it changes the dynamics of the litigation. It might change the atmosphere in which further settlement discussions might go forward. But I think our board is ~ur rently united in pursuit of the appeal. And they'll continue to do that. GH: This is legal action. It didn't have anything to do with personalities. It's a straight-up appeal. A A ap peal being filed mean . Q Doesorthesettlementnecessarily the that no will ever be reached, is that not case?

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