Motorsport.com -- Jonathan Vannini now owns over 1.2 M shares of common stock in Championship Auto Racing (NYSE symbol MPH) and has filed another SEC Schedule 13D (Statement of Ownership). In a earlier filing, Vannini made statements regarding...
Motorsport.com -- Jonathan Vannini now owns over 1.2 M shares of common stock in Championship Auto Racing (NYSE symbol MPH) and has filed another SEC Schedule 13D (Statement of Ownership).
In a earlier filing, Vannini made statements regarding conflicts of interest between what is best for CART versus personal gains by some members on the BOD.
On October 31, 2001, Vannini sent a letter to the Board calling for the resignation of six of the Board memember. The six, not named in the report or the letter, are: Gerald Forsythe, Chip Ganassi, Barry Green, Carl Haas, U.E. 'Pat' Patrick, and Derrick Walker.
In an earlier filing, Vannini did not call for the removal of Joe Heitzler who is currently the Chairman of the Board and the CEO of CART but instead did indicate that Heitzler should focus on just one positition and that someone else should handle the day-to-day operations. Again, he has not called for Heitzler to give up either of the positions; however, he has made a suggestion regarding a new position to be created.
In the letter, Vannini refers to the position as "management of the Company's operations." He further mentioned a candidate, Christopher Pook.
Herewith is the letter:
LETTER FROM THE REPORTING PERSON TO CART'S BOARD OF DIRECTORS, DELIVERED ON OCTOBER 31, 2001.
Board of Directors
Championship Auto Racing Teams, Inc.
755 West Big Beaver Rd., Suite 800
Troy, Michigan 48084
As a significant shareholder of Championship Auto Racing Teams, Inc. (CART), I am writing to express my deep concern about the present management and governance of the Company. As you are aware, there are currently six racing team owners that are members of the CART Board of Directors. I believe that these directors have actual and potential conflicts of interest with CART and its shareholders.
These actual and potential conflicts include, but are not limited to:
1) Several team owners are also promoters of race events, either directly or in partnership with others.
2) The team owners may have economic relationships with industry suppliers that have interests and objectives that are contrary to those of the Company.
3) Certain team owners are or might become full-time participants in the series sponsored by our direct competitors.
4) Certain team owners have positions on various committees of the Board, which gives them an influence with management that may be contrary to the Company's interests.
5) One team owner sold an enterprise to the Company for over $10 million that was shortly thereafter closed, resulting in a nearly $10 million charge to earnings.
6) Several team owners sold significant stock just prior to the Company's adoption of a new engine package that was universally scorned and immediately precipitated the withdrawal of the remaining two engine suppliers. CART's stock price predictably dropped sharply after the public announcement.
This list is far from exhaustive but illustrates the existence of serious actual and potential conflicts of interest between these directors and CART. This situation is untenable. For that reason, I urge these directors to resign their positions immediately.
Further, I believe that CART critically needs a day-to-day operating manager. There may be flexibility concerning the formal title, but the position should be sufficiently senior and entrusted with the required power to permit the effective management of the Company's operations. I believe that Christopher Pook is the logical candidate for that position. The Board of Directors should immediately consider creating such a position and extending an offer to Mr. Pook.
The above requests, I believe, are prudent, sound and plainly in the best interests of CART, its shareholders and the sport. I look forward to your immediate action on these critical matters.
Jonathan P. Vannini