strad wrote:When for a scam do you invest as much as has already gone down on this?
When it is someone else's money, or it's all IOUs. Think Qadbak.
~ Hellmund had a 10-year agreement with FOM to hold the USGP in Austin.
~ A “Company Agreement”, entered into in December 2010, “required Epstein/McCombs to provide the funding” for the COTA circuit Hellmund had designed. The agreement established Hellmund as the only Class C manager, with a 10-year contract for employment as the Chairman of the FIA Formula 1 United States Grand Prix, with a yearly salary of $500,000.
~ “The sole basis of Epstein/McCombs' approximately 75% stake in the Company was their promises to fund it, not borrow against Hellmund's assets.”
~ “The Company Agreement requires that Hellmund use his best efforts to assign the
F1 Contracts to the Company only if Epstein/McCombs provide or raise $190 million of funding by March 31, 2011. However, Epstein/McCombs failed to commit the required funding by the deadline, thereby absolving Hellmund of any obligation to assign the Fl Contracts. Indeed, Epstein/McCombs missed the funding deadline by nearly six months, reporting they obtained the required funding on September 13, 2011. Even then, Epstein/McCombs refused to provide the documentation (e.g., commitments) of the funding necessary for Hellmund to assign the Fl Contracts.”
~ “Epstein/McCombs finally notified Hellmund, albeit six months late, that they had secured the $190 million in funding. However, Epstein/McCombs still refused to
provide Hellmund with any verification of the allegedly binding commitments for funding, which meant that the F1 Contracts could not be assigned. Ecclestone, the F1 head, himself made this abundantly clear in a letter to Hellmund: "I made it clear that the proposed circuit where you want to conduct your event, needed to provide an executed construction contract, proof of financial strength and that I required this documentation . . . . " In that same letter, Ecclestone aptly acknowledged that these "repeated failures" were "perhaps not of [Hellmund's] doing." Hellmund relayed this message to Epstein/McCombs to no avail. Epstein/McCombs still did not provide the necessary verification of the funding despite promises they would do so, jeopardizing
Hellmund's ability to assign the F1 Contracts to the Company and/or its subsidiaries.”
~ METF funding was negated by the COTA investors' refusal/inability to pay $4M to the METF to trigger the advance reimbursement payment, after COTA had excluded Hellmund from making the payment himself. They then plead ignorance. Company attorney Richard Suttle weighed in: "I am a little astounded that with all the work that has gone into
this issue, along with all the conversations and documentation that has occurred, that there can be any confusion about COTA's commitment to fund the $4mil." The investors ignored Suttle. The $4M was never paid. The guaranteed $250M ($25M x 10 years), arranged by Hellmund, was lost.
~ “the F1 Contracts could not be assigned until the Company:
(1) paid the $23 million sanctioning fee (which could no longer be paid from the METF),
(2) provided verification of binding commitments for construction funding (specifically $190 million which was now 4 months overdue), and
(3) provided a revised construction schedule.
Epstein/McCombs did not pay the sanctioning fee, never provided verification of the
funding (even after they claimed to have raised the $190 million six months after the deadline), and did not provide a revised construction schedule”
~ “Epstein/McCombs' refusal to pay the sanctioning fee under Hellmund's
F1 Contracts resulted in the termination of those contracts and new and more expensive contracts for the Company. The new F1 contracts required additional guarantees for future races, something not required in the original F1 Contracts. Additionally, due to Epstein/McCombs' substantial delay in paying the sanction fee, the Company owed late fees to Formula 1.
77. During Epstein/McCombs' well-publicized standoff with Ecclestone, it IS no
surprise Comptroller Combs announced that the State would not advance COT A any METF funds and would only consider releasing funds after a race occurred.
78. Again, Epstein/McCombs' gamesmanship (or lack of experience) destroyed
significant benefits for the Company- they lost the committed METF funding while having to ink a new, more expensive Formula 1 contract.”
~ COTA construction was underfunded from the start, and suffered repeated delays due to lack of funding & mismanagement by COTA investors. The entire project has been delayed & endangered by this underfunding and mismanagement. The investors also concealed the lack of funding from Hellmund.
~ “With no construction funding in place, Epstein/McCombs repeatedly entered and amended limited contracts with the construction company to proceed in small phases based on short-term personal guarantees. Epstein/McCombs concealed from Hellmund these construction schedule changes and the lack of funding.”
~ Attempting to secure construction loans, Epstein & McCombs attempted to leverage Hellmund's own asset (F1 race rights) for construction loans without using any of their own assets.
~ Epstein misled Hellmund regarding the nature and soil quality of the COTA land and the size and nature of natural gas pipelines running beneath it.
~ COTA investors agreed in writing on September 29, 2011 to an $18M buyout of Hellmund, relieving him of his position, his stake in the company, and of the F1 rights and rights to the MotoGP race at Circuit of the Americas. They have since refused on multiple occasions to honor the agreement at scheduled closings and have not paid Hellmund his salary.
~ “Hellmund has not quit, nor has he been terminated. In fact, he continues pursuing the Company's best interests as Chairman and has actively sought - but has been foreclosed from - more involvement.”
~ Epstein & McCombs attempted 3 times in 2 months recently to illegally remove Hellmund from his position as Manager, but “No matter how many notices they sent or meetings they held to attempt the same unlawful removal, EpsteinlMcCombs failed every time for the same reason: the Company agreement requires Class C member approval and they never had it.”
~ Epstein & McCombs have repeatedly refused Hellmund access to financial records, despite written requests.
~ Allegations, even an admission that at least one or more associates of Epstein’s repeatedly & maliciously tampered with Hellmund's Wikipedia page in an attempt to discredit & marginalize him.
~ Hellmund turned down an offer to lead the New Jersey F1 Grand Prix of America effort
~ “Hellmund offered to buyout Epstein to salvage his dream. Although agreeing that a buy-out of one of the members might be necessary, Epstein responded: "There is no . . . way I'll let Tavo Hellmund buy me out."
~ Hellmund has invoked a buy/sell clause in the agreement, apparently desiring to buy McCombs’ share of the company.
WhiteBlue wrote:...the investors who were only providing land and capital and held 75% of the company capital...
Pup wrote:WhiteBlue wrote:...the investors who were only providing land and capital and held 75% of the company capital...
Interesting use of the word 'only'. If Tavo felt the same about the significance of their contributions, then it's no wonder the deal soured.
hairy_scotsman wrote:He signed over 3/4 of his baby to these guys in return for them doing something they ended up not doing...and somehow he's the bad guy?
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