No. 40 owner sues for possession of No. 95 team’s charter
It didn’t take long to have the first lawsuit involving the ownership of a Sprint Cup Series charter.
Mike Hillman, the owner of the No. 40 car that entered the Daytona 500, has sued Circle Sport Leavine Family Racing and Joe Falk for the ownership of the charter that currently belongs to the No. 95 car in the Sprint Cup Series. The charter system was introduced before the 2016 season as a franchising model to help guarantee NASCAR owners some sort of equity. To be eligible for a charter, a team had to have competed full time in the Cup Series from 2013-15.
Falk, which has been the listed owner of the No. 33 car in the Cup Series, merged with Leavine Family Racing before the 2016 season. The merger allowed the charter granted to the No. 33 car to be for the No. 95 car, which now runs full time and is primarily driven by Michael McDowell.
Falk and Hillman used to be business partners as they operated the Nos. 40 and 33 cars. In the lawsuit, filed in a North Carolina court, Hillman alleges that Falk hasn’t held up his end of the bargain when it comes to the operation of the two cars and sought the merger with LFR outside of Hillman’s knowledge.
In May 2015, according to the complaint, Falk sent Hillman an email stating that he wanted to own the No. 33 car’s points outright at the end of the year. Hillman did not respond because the remaining partners did not want to modify their termination agreement.
The complaint states that in Oct. 2015 Hillman was informed by NASCAR personnel that material terms of the charter system had been agreed upon. Court documents state that NASCAR informed Hillman that the field would be reduced from 43 to 40 cars and that 36 would receive charters. Hillman was informed that the No. 33 would receive a charter but not the No. 40.
The complaint states “because the Partnership continued to have Circle Sport listed as the designated owner of the 33 points, NASCAR personnel informed Falk that the 33 car could receive a charter.’’
In late January 2016, Circle Sport announced its merger with Leavine Family Racing. The complaint states that Hillman and his partners were not included in the discussions with Leavine and that the announcement came as a “surprise.’’
Per the lawsuit, the relationship between Falk and Hillman started to decline after the 2014 season. You can read all of the details about it on NBC in the link above.
The lawsuit also provides a unique look at how much it cost to purchase owner points under the pre-charter system. Falk and Hillman purchased the owner points for the No. 33 car from Richard Childress Racing for $100,000 in 2012 after the Texas race because the car was not in the top 35 in points.
As the team entered into an agreement with RCR for RCR’s use of the car in select races and RCR provided a discounted engine for the 2013 Brickyard 400. In 2015, RCR paid $25,000 for the use of the No. 33 and $75,000 for the car in the Daytona 500.
Reed Sorenson behind the wheel of the No. 40 at Daytona. The team didn’t make the race. Ty Dillon was the driver of the No. 95 for Circle Sport-Leavine Family Racing as part of the deal with RCR and McDowell qualified for the race in a second car (No. 59).
– – – – – – –
Nick Bromberg is the editor of From The Marbles on Yahoo Sports. Have a tip? Email him at [email protected] or follow him on Twitter!
