After having its court date postponed with Union Bank & Trust on Feb. 5, BK Racing filed a Chapter 11 bankruptcy on Thursday in Western District Court of North Carolina.
According to Chapter 11 bankruptcy, it generally provides for reorganization, usually involving a corporation or partnership. It also allows a business to propose a plan or reorganization by which they will restructure their debts.
Following the ruling, BK Racing team owner Ron Devine reached out to Frontstretch stating “It’s a [Chapter] 11 and we will come out as soon as we can get things worked out with the bank and engine supplier. We’ve been negotiating with the bank all day. [We] got close, but ran out of time. BK Racing will do everything it can to continue racing.”
NASCAR issued a statement to NBC Sports regarding BK Racing’s current status in the sport and the No. 23 charter the company owns.
“We have a clear process around charter member governance. It is incumbent upon charter members to be ready to race and compete at the highest level. BK Racing remains the holder of the Charter.”
The filing came just before a scheduled hearing on Thursday where Union Bank and Trust’s requested to have a receiver to oversee BK Racing’s collateral, claiming it owns over $8 million in loans.
ESPN reported that as of last week BK Racing was facing a federal tax lien greater than $667,000, while also owing the North Carolina department of commerce fees roughly $66,000, according to court record.
While filing its bankruptcy on Thursday, BK Racing estimated the number of its creditors as 50-99, estimating its assets as between $10-50 million with an estimated $10 million in liabilities.
Gray Gaulding is scheduled to roll off 20th in Thursday evenings second Can-Am Duel.