Racing school’s $1.6M auction depends on what’s in a name - SanTan Sun News SanTan Sun News

Racing school’s $1.6M auction depends on what’s in a name

April 4th, 2019 development
Racing school’s $1.6M auction depends on what’s in a name

By PAUL MARYNIAK, Executive Editor

The internationally renowned Bob Bondurant School of High Performance Driving could be under new ownership by May if a big question can be answered to the new owners’ satisfaction:
Can it still be called the Bob Bondurant School if its namesake no longer has anything to do with the legendary automobile racing-training facility?
A federal bankruptcy judge last month approved the school’s sale for $1.67 million – if the winning bidder can work out a lease with the tribal firm that owns the land as well as resolve a dispute over the use of the Bondurant name.
Stig Investments Inc. beat out five other bidders for the famed racing school just south of Ahwatukee, according to minutes of the courtroom auction that were filed last week in federal court.
Judge Brenda K. Martin gave Stig until early May to work out a lease with Sun Valley Marina Development Corp. – a development arm of the Gila River Indian Community, where the school has been located since 1990. Racing legend Bob Bondurant and his wife Patricia founded the school in California in 1968.
Martin allowed the school to be auctioned after the Bondurants’ bankruptcy lawyers saw no other way to save it from a sea of red ink.
But the personal attorneys for the Bondurants asserted that whether the name will be part of the acquisition had to be settled by a separate agreement between them and whoever placed the winning bid.
Also off the table in the auction, they asserted, is a museum on the site that contains extensive memorabilia and a small fleet of motorcycles and cars at the site, located on the Gila River Indian Community next to Wild Horse Pass Motorsports Park.
With $3.5 million in debts, the Bondurants filed for bankruptcy last October – nine months after the couple had celebrated the 50th anniversary of the school’s founding in Orange County, California. It moved to the Gila River Indian Community site in 1990.
Over those 50 years, the school has been a training ground for an estimated 500,000 beginners learning to drive, military and law enforcement personnel learning advanced pursuit and evasion techniques and competitive racers. It also became a popular venue for corporate team-building activities and charity fundraising events.
In the nine months that followed the anniversary celebration, a variety of factors pushed the school into seeking bankruptcy protection so it could reorganize its finances.
Those factors included the loss of “a substantial contract with the U.S. Government to train military personnel” that was worth millions, and a downturn in the auto industry’s economy that resulted in what the Bondurants called “inconsistent” payments from the school’s two primary sponsors – Dodge and Fiat.
As a result, court papers state, that “disrupted Bondurant School’s ability to remain current with its own vendors” – including rent to an arm of the Gila River Indian Community, which owns the site where the school is located. Back rent now totals more than $245,000.
Lawyers for the school called the auction an effort to “continue operation as a going concern and avoid liquidation in the near future.”
They also told the court the school’s financial state had further been hurt by a walkout in November that was led by the Bondurants’ son, Jason, who had been the school vice president until he resigned late last year.
In turn, that rumor cost the school its “most long-standing sponsor,” Goodyear Tire & Rubber Co., which lawyers said terminated a 45-year relationship “with scant explanation.”
The school then lost its insurer, forcing it to get a more expensive policy, as landlord Sun Valley Marina Development Corp. threatened to lock out school personnel and take over the facility for nonpayment of rent and banks sought to repossess dozens of racing cars for failure to maintain timely lease payments.
The school to no avail also “engaged in discussions, document and information exchange and negotiations with more than 20 individuals and groups” to secure some kind of emergency financing and provide relief from creditors’ pressure, court records show.
Several banks also wanted to repossess at least 100 high-performance and other cars worth more than $9 million.
In the fight over the name, the Bondurants’ personal lawyers filed court papers objecting to the sale including Bob Bondurant’s “name and likeness and related intellectual property” as well as the museum.
“Any buyer of the (school’s) assets will not acquire the right to use Bob’s name and/or likeness, the memorabilia or any of the information in the archive unless he, she or it reaches a separate agreement with the Bondurants,” the couple’s lawyer told the court.
The museum houses seven motorcycles – one dating to 1940 – and dirt bikes and nine high-performance and other automobiles as well as a variety of memorabilia from Bob Bondurant’s days as an international racing star.
In an affidavit filed with the court, his wife said he stored the memorabilia at the school and displayed it in a museum on the site “because he knew and appreciated the curiosity and great interest that customers of the school had in those vehicles and the other assets due to Bob’s career as one of the country’s greatest American race car drivers.
“He also knew that many fans of motor racing as well as persons passionate about classic vehicles were interested in seeing the museum cars, the memorabilia, the photographs and other material in archive and the other property,” her affidavit added.
Patty Bondurant also ended her affidavit with a stern warning.
Unless someone negotiated the sale of everything from the vehicles to the use of Bob Bondurant’s name, she said, “Any purchaser will be required to remove Bob’s name and likeness and my name and likeness from all web sites, social media platforms, retail locations, advertising, publicity pieces, signs, vehicles and any and all other material in any form.
“Bob and I will aggressively prosecute causes of action against any person, including a purchaser of the school, who uses any of the museum cars, memorabilia, other property, his name and likeness, photographs, videos, articles, interviews of bob or me and/or any pictures or information from the archives without first entering into agreements with bob on terms acceptable to us.”
But the lawyers for the school disagreed strenuously and said the Bondurants have lost any legal right to protect their name from continuing to be used regardless of whoever owns the school.
“To be absolutely clear: no party wants to treat Bob Bondurant unfairly. All parties recognize he built this business over an illustrious 50-year career. What he owns, the (school) is not attempting to take.”
On the issue of the museum, they noted, “There are multiple ‘Museum Cars’ that have no clear evidence of ownership.”
The school’s lawyers also asserted that the school, and not Bondurant personally, owns his name, memorabilia and image.
“Bondurant cannot lawfully prevent the use of his name, image or likeness embodied in the marks, or currently embodied in the memorabilia and archive; the Bondurant name embodies the significant goodwill that has been built over the 51-year history of the school,” they said, adding:
“The statement that Mr. Bondurant never transferred the right to use his name or the memorabilia or the archive to the (school) is demonstrably false.”
It added that the prospective new owner would own virtually anything with Bob Bondurant’s name – even his personalized signature.