The Circuit of The Americas, the new grand prix track being built outside Austin Texas (LEFT) that is scheduled to host the return of F1 to the U.S. this November, today filed with the District Court of Travis County, Texas an amended plea and motion to compel arbitration, and voluntarily agreed to have the temporary sealing order vacated in its legal dispute with former COTA principal Tavo Hellmund and his various legal entities.
Information contained in the pleading will release to the public information that had been temporarily sealed by the court until the presiding judge had the opportunity to rule on whether the dispute would be resolved through binding arbitration. The move follows a separate plea filed by the Austin American-Statesman newspaper earlier this month seeking access to the sealed court records of the case.
"The F1 project is too important and involves too much taxpayer money for any records in this case to be sealed from public view," Statesman Managing Editor John Bridges said in explaining the newspaper's involvement in the suit. "We intervened on behalf of the public and are pleased that the sealing order has been lifted."
COTA officials say that its filing substantiates its position that, "clearly stated in the Accelerator Holdings LLC partnership agreement signed by circuit investors and Hellmund in December 2010, any controversy, claim or dispute between or among the Company and any Member or among Members arising out of or relating to this Company Agreement or any other matters pertaining to the Company, shall be settled by binding arbitration.”
Accelerator Holdings has a minority interest in Circuit of The Americas.
COTA chairman Robert Epstein reiterated the company's desire to put an end to the dispute with Hellmund through binding arbitration. “Our intent from the beginning has been to resolve this matter efficiently through the agreed-upon binding arbitration process, and we feel that unsealing the court records moves us closer to this goal,” said Epstein.
Added the track's attorney, Michael Whellan, “We believe the facts made public through today's filing strongly support our position that Mr. Hellmund's claims and accusations – and his misrepresentations to Circuit representatives and the public about his ability to assign Formula 1 race contracts – only serve to undermine his case.
“We believe the tactics Mr. Hellmund and his legal team have employed to date are meant to purposely generate negative public sentiment about Circuit of The Americas in hopes of extracting a large settlement. Unfortunately, we do not expect these tactics to end anytime soon. Nonetheless, we are prepared to arbitrate this dispute as the parties have agreed to do in writing.”
In March, Hellmund filed a lawsuit against project investors Epstein and Red McCombs, plus other companies involved in the United States Grand Prix at Austin. The suit did not reference the damages he was seeking, but mentions a potential buyout option that he claimed was supposed to have taken place, and a $500,000 salary per year he was supposed to have received for the next 10 years. In his suit Hellmund claims that his share of the company is 20 percent, about the same as that of McCombs.
Eric Wetzel, a spokesman for Hellmund's legal team, released the following statement in response to COTA's filing:
“If Bobby Epstein truly desires an efficient resolution of his dispute with Tavo Hellmund, as he now claims, he can simply honor the $18 million buyout agreement that he signed in September of 2011. If not, Tavo is prepared to amend his pleadings to include charges of fraud and other misdeeds, based on newly discovered evidence. We believe this evidence demonstrates that Mr. Epstein intended to force Tavo out of the F1 project from the beginning. As required by the September agreement signed by Mr. Epstein, these new claims will be litigated in the Travis County, Texas courts – not in a secretive arbitration proceeding.”