The future of Chandler Speedway races toward an auction, but it may not sell. The man behind the track plans to slam the brakes on any bids before it hits the block.
The Speedway is still scheduled to be sold March 20, but a Chapter 11 bankruptcy filing could be a way for the owner, Reno Fontana, to buy more time.
Fontana has the title to the track, though his ownership is disputed.
He says there are plans to open “Movieland Speedpark” this spring, despite the impending auction. Eyewitness News tried reach Fontana over the phone, but he wasn’t available. He lives in California.
Fontana’s post on Facebook says he will file Chapter 11 one day before the auction.
“THERE WILL BE NO AUCTION!!” Fontana wrote. “I’m going to take advantage of the law to save the Chandler Raceway.”
Bankruptcy lawyer, John Andrew Goodridge says it is common for companies with a lot of money or a lot of debt to use this type of filing.
“Useful for companies that can otherwise conduct business, but they have a handful of aggressive creditors that are forcing them out of business,” Goodridge said.
Auctioneer Andrew Wilson says Fontana owes creditors $125,000. The sale is designed to satisfy those people owed, but Chapter 11 will freeze it all.
Immediately upon filing, it issues an automatic federal injunction. It gives debtors room to breathe without having to defend creditors. It is designed to promote reorganization of debt to climb out of bankruptcy.
Airlines, car makers, and other major brands have filed for Chapter 11. Goodridge says it gives struggling business a fighting chance to come back.
“Often companies do survive Chapter 11’s and they emerge from bankruptcy a reorganized entity and able to continue doing business,” said Goodridge.
Bankruptcy is typically a positive for people owed money. Goodridge says Chapter 11 treats all creditors the same, so an individual or company last in line for repayment gets the same treatment as the individual or company first in line.
“If your [sic] planning on racing at Movieland Speedpark in Chandler in 2019, and in 2020, and every year thereafter to 2075, keep your plans in place,” Fontata wrote on Facebook.
William Wilson Auction house says they’ve dealt with threats of bankruptcy filings before.
Wilson says the track is still scheduled to be sold.