The sound of roaring engines and screeching tires have returned to Bondurant Racing School, but can the bankrupt, 50-year-old company hang on through the nasty corner it's taken?
Classes have resumed at the popular race-car-training company at Firebird International Raceway. Souped-up "SRT"-model Dodge Chargers and Challengers zoomed around pylons as students learned to unleash their need for speed in a traffic-free environment.
"We're back up and running," Mike McGovern, the school's operations manager and chief instructor, said last week. He added that the school was building a new team of employees and could use mechanics.
The temporary closure last month made headlines on auto aficionado sites nationwide, reported first by Carter Nacke of ClassicCars.com, and followed previous stories about the school's October 2 Chapter 11 bankruptcy filing. It owes between $1 million and $10 million, court records show. However, under the terms of a Chapter 11 bankruptcy, a company is allowed reorganize to manage its debt and appease its creditors.
Bondurant's bankruptcy lawyer told a judge on November 27 that the school remains prepared to host a "shoot out" on December 8 and 9, referring to the previously announced Mazda Road to Indy USF2000 $200,000 Scholarship Shootout.
Further out, it's unclear at this point what will happen to the popular race-car-training company, which moved from California to its current location in Chandler in 1990.
Arizona U.S. Bankruptcy Court approved the appointment of a chief restructuring officer, Timothy Shaffer of Clotho Corporate Recovery, LLC., according to a news release by Bondurant's spokesman, Aaron Cook of TimePiece PR.
As the release explains, Shaffer will take over leadership of the company. Owners Bob Bondurant, who drove in Formula One championships in the 1960s, and his wife, Pat Bondurant, the CEO and president, will serve as consultants for now. Shaffer will also try to find a buyer or investor for the company as he goes through its financial records and formulates a reorganization plan.
"Pat and Bob Bondurant are equally committed to helping the school get back on track," Shaffer said in the statement. "Our collective goal is to return the company to normal operations and ensure the school is a part of our local and national racing communities for many years to come."
The road ahead has some bumps, recent court filings show.
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"The debtor is rebuilding the staff and conducting interviews," state the minutes of the November 27 meeting in Arizona U.S. District Court. "The debtor was closed for about a week and is trying to get the word out that they are open and running classes. [Hilary Barnes, the school's attorney] provides an update on the debtor's finances. The first monthly operating report is delinquent. She talked to the U.S. Trustee's office and will remedy it this week."
Meanwhile, a lawyer for Fiat Chrysler Automobiles was "surprised" during the meeting when Bondurant talked of the current restructuring plans, because the plans didn't mention "her client's fleet of vehicles," records say.
Besides teaching classes, Bondurant also has a deal with FCA to give buyers of new Dodge vehicles with SRT or Abarth trim packages a free one-day class. The international automobile maker gave the school $9 million worth of vehicles for those classes, and now it's worried whether the school has proper insurance for everything, a November 30 court filing shows. A proposed court order by FCA's lawyers states that Bondurant must show it has insurance for the vehicles beyond the end of the year, and can account for every one of the vehicles.
The race to a successful reorganizing has a few laps to go.