COTA Austin - construction and infrastructure

[hairy_scotsman]

...it is not, and was never, contingent on Tavo's involvement in the project.

If Tavo doesn't have the idea...if he doesn't act on it...if he doesn't lobby the Legislature, Kirk Watson, Susan Combs, Rick Perry, etc, that money would never have been available.

Tavo's sole asset was the F1 rights.

Don't forget the MotoGP rights, which he still owns with Schwantz. That was one of the key components of the buyout that was agreed to & never executed.

When will COTA step up and secure those rather than merely hinting that they'll host MotoGP?

[WhiteBlue]

I think you're misreading my post. What I mean by E&C writing checks is that they assuredly both put some of their own money into the project at the start, money which formed the basis for the partnership. Tavo's basis was likely the F1 rights.

About Tavo, what I'm saying is that while he wasn't required by the agreement to turn over the F1 rights immediately, perhaps doing so would have been in both his and the project's best interest. Not that it wasn't the smart move in the beginning, but later it seems like it would have been better to go ahead and assign the rights. I think he got some bad advice at some point and as a result thought that he needed to keep the F1 rights to defend his own against untrustworthy partners. But ironically, it was the fact that he didn't assign those rights early that enabled E&C to cut him out of the deal.

I'm not misreading. I'm objecting to your misrepresentations.

The petition made it clear that the - partly intellectual - capital brought into the company by Tavo - equal to 25% of the partners total asset valuation - were the business idea, the sponsorship secured on the basis of certain conditions of $250m by the METF, the F1 contracts, the MotoGP and the V8 supercar contracts.

The investors brought in cash and real estate of unknown value representing 75% of the company assets. The company contract reportedly also spelled out the time schedule and conditions for the sequence of injecting those assets. It is undisputed so far that Hellmund observed all elements of that schedule while the investors allegedly violated the agreed schedule.

To retrospectively say that he could have improved the situation by exceeding his duties to contribute to the assets controlled by the company is gross. The other side was in arrears and failing to do their duty. No business person with a bit of sense would react in the way you suggested that Hellmund should have done. It would have in no way prevented him from being squeezed out. I'm really wondering what strange logic you construct for that theory. If a partner starts to fall behind in his duties would you increase your input of assets in the venture over and above schedule to make up for his failures in order to prevent him to screw you over even more? Not very likely.

I guess that means a billion over 40 years then, now that's some contribution!

Contingent on the whimsy of the Texas Comptroller.

That's another misrepresentation. There were contracts that secured the METF sponsorship up to $250m to be paid in ten years. And this sponsorship was not subject to whimsy. The first 25m were due to be paid without further conditions of inspection in December 2011. All subsequent payments were conditional to the event reaching the calculated and planned economic impact.

Regardless of how one values the METF money, it was never an asset. An accomplishment? OK, sure. But not an asset - it is not, and was never, contingent on Tavo's involvement in the project. Tavo's sole asset was the F1 rights. And his cuddly demeanor.

Yet another misrepresentation. Sponsorship by the state of $250m over ten years or $160m in discounted cash is a very substantial asset for the business of COTA to have secured on very leisurely conditions. It is silly to say that such an asset has no value. Epstein through his actions destroyed the asset that was created by Hellmund and he will have to earn it back even partially by hard work and lobbying. If he will ever come close to bring in such a big price will be seen. Personally I believe he never will, because his mismanagement and inexperience will destroy a big part of the business potential that Tavo's plan would have created. We are clearly seeing that with the marketing disaster that is unfolding over the PSL strategy which causes countless US F1 fans to give up their plans for visiting the 2012 Grand Prix. Just follow the debate at Autosport forums if you do not believe my opinion.

[WhiteBlue]

Regardless of how one values the METF money, it was never an asset.

It's never even been paid, and there's no guarantee that it will. For the sake of this conversation, it's a bit like talking about the Tooth Fairy.

That is a silly comparison that is completely inappropriate to the issue. You seem to be unaware about the difficulties of the US sponsorship market and how hard it is to get that kind of a commitment from the METF in times of a global recession and budgets cuts all round. The first payment was almost due to be paid to COTA when Epstein destroyed the agreement with the comptroller by withholding funds from the company. COTA and the company which will own the circuit is now at least $19m poorer due to the failure of the investors to raise the working capital according to schedule.

[bhall]

Fair enough. But, if the success of a $300,000,000 project ever hinged upon a $25,000,000 contribution from the state, the project was doomed from the beginning.

[Pup]

I think you're misreading my post. What I mean by E&C writing checks is that they assuredly both put some of their own money into the project at the start, money which formed the basis for the partnership. Tavo's basis was likely the F1 rights.

About Tavo, what I'm saying is that while he wasn't required by the agreement to turn over the F1 rights immediately, perhaps doing so would have been in both his and the project's best interest. Not that it wasn't the smart move in the beginning, but later it seems like it would have been better to go ahead and assign the rights. I think he got some bad advice at some point and as a result thought that he needed to keep the F1 rights to defend his own against untrustworthy partners. But ironically, it was the fact that he didn't assign those rights early that enabled E&C to cut him out of the deal.

I'm not misreading. I'm objecting to your misrepresentations.

The petition made it clear that the - partly intellectual - capital brought into the company by Tavo - equal to 25% of the partners total asset valuation - were the business idea, the sponsorship secured on the basis of certain conditions of $250m by the METF, the F1 contracts, the MotoGP and the V8 supercar contracts.

The investors brought in cash and real estate of unknown value representing 75% of the company assets. The company contract reportedly also spelled out the time schedule and conditions for the sequence of injecting those assets. It is undisputed so far that Hellmund observed all elements of that schedule while the investors allegedly violated the agreed schedule.

To retrospectively say that he could have improved the situation by exceeding his duties to contribute to the assets controlled by the company is gross. The other side was in arrears and failing to do their duty. No business person with a bit of sense would react in the way you suggested that Hellmund should have done. It would have in no way prevented him from being squeezed out. I'm really wondering what strange logic you construct for that theory. If a partner starts to fall behind in his duties would you increase your input of assets in the venture over and above schedule to make up for his failures in order to prevent him to screw you over even more? Not very likely.

There's nothing in all that that is different from what I wrote in the very post you've quoted - except for your conclusion, which is opinion and which I'd already addressed. But then, you clipped out that part of my post - why was that, Mr. Misrepresentation?

Contingent on the whimsy of the Texas Comptroller.

That's another misrepresentation. There were contracts that secured the METF sponsorship up to $250m to be paid in ten years. And this sponsorship was not subject to whimsy.

It's not a misrepresentation in the least. There was never a contract. Combs herself said that her letter only certified her 'optimism and support' and was 'not a contractual obligation'. Laughable, sure, which is where the whimsy comes in play. In truth, nothing could be guaranteed until an actual application was made by the city or county; that application couldn't be made prior to one year before the event; and any money from the fund could only be paid to the city or county and after the event took place. In that light, it's probable that CoTA could have never seen, nor ever will see, any of that money. Combs seemingly overstepped her bounds by a large margin and later, when she was under threat of a legal investigation over the affair, tried to pretend like she'd never made any guarantees to begin with. Here...

http://www.kxan.com/dpp/news/investigat ... ncial-role

And read the statute for yourself if you like...

http://www.statutes.legis.state.tx.us/D ... tm#5190.14

Regardless of how one values the METF money, it was never an asset. An accomplishment? OK, sure. But not an asset - it is not, and was never, contingent on Tavo's involvement in the project. Tavo's sole asset was the F1 rights. And his cuddly demeanor.

Yet another misrepresentation. Sponsorship by the state of $250m over ten years or $160m in discounted cash is a very substantial asset for the business of COTA to have secured on very leisurely conditions. It is silly to say that such an asset has no value. Epstein through his actions destroyed the asset that was created by Hellmund and he will have to earn it back even partially by hard work and lobbying. If he will ever come close to bring in such a big price will be seen. Personally I believe he never will, because his mismanagement and inexperience will destroy a big part of the business potential that Tavo's plan would have created. We are clearly seeing that with the marketing disaster that is unfolding over the PSL strategy which causes countless US F1 fans to give up their plans for visiting the 2012 Grand Prix.

I don't know what the PSL's have to do with this. Look, we're talking about legal assets here. It's really great that he got F1 eligible and that he got an apparently meaningless letter of commitment from Combs. But he had no ownership of those things - they don't mean anything legally. Nor does any of the other stuff he goes on about. The F1 rights? Sure. The MotoGP and Aussie rights? Maybe - I'm not so sure of the timing on those, but ok. But not what you are mistakenly calling 'intellectual' assets. Goodwill, perhaps? Maybe I could give you that.

Just follow the debate at Autosport forums if you do not believe my opinion.

Yes, the Autosport Forums. Where every wise man goes in search of Truth.

Though perhaps Flowvis Jesus could give us guidance.

[WhiteBlue]

Fair enough. But, if the success of a $300,000,000 project ever hinged upon a $25,000,000 contribution from the state, the project was doomed from the beginning.

You cannot apparently do your maths or you do not know finance. The state sponsorship contract which was already established and was destroyed was worth $160m discounted to present cash value. This is a substantial part of a $300m project as anybody with a bit of basic understanding can grasp.

It is potentially possible that part of the sponsorship will be recovered but never at the volume that was originally conceived because the GP scheme has now been shortened from 10 years to a shorter unknown period.

It is also very much debatable if the favourable conditions of the first agreement between Hellmund and METF will ever be met again. Nobody can predict how that new lobbying process will file through the bureaucracy and what kind of interference other interest groups will run. With all the (negative) publicity brought on by Epstein's mismanagement the conditions might be a lot less advantageous.

[hairy_scotsman]

Hellmund in P1 to be Allsport boss?

http://pitpass.com/45685-Analysis-Hellm ... sport-role

This could be great for COTA, assuming they make things right. It could never hurt to have someone on your side in a senior F1 position.

[WhiteBlue]

There's nothing in all that that is different from what I wrote in the very post you've quoted - except for your conclusion, which is opinion and which I'd already addressed. But then, you clipped out that part of my post - why was that, Mr. Misrepresentation?

I'm not going to argue in loops with you. Your first post on the issue was this: viewtopic.php?p=319045#p319045

... I'm sure that E&C both wrote checks at the start of the partnership. I'm guessing that Tavo's asset was the F1 rights, and if so, I don't know why he refused to turn it over. You'd think that would have been done the day the partnership was formed...

What it seems like to me is that Tavo convinced them to allow him to maintain ownership of the rights until certain conditions were met. That's all fair, smart even, but if that's true then what I don't understand is why Tavo ever considered himself a partner when it seems the marriage was never consummated. And that's why I don't think his suit has legs...

If you had read the paper you would know that you got it all wrong in the sentences I quoted. I will only remark on the most obvious points and not explain it all over again: With the signing of the company contract Hellmunds assets were valuated at 25% of the total assets which were to be introduced into the company. The investors assets were valued at 75%. There was also a schedule set forth which was adhered to by Hellmund and not by the investors. You disregard those points and stipulated that Hellmund caused the trouble by not inserting assets at the convenience of the investors. The man brought a lot to the table in intellectual property and prior work beyond the race contracts. He invented a business model that made the GP feasible in the first place. At the time it was the first such business models that has so far succeeded in the US to generate a GP contract and the investment for a dedicated first class venue.

It's not a misrepresentation in the least. There was never a contract. Combs herself said that her letter only certified her 'optimism and support' and was 'not a contractual obligation'. Laughable, sure, which is where the whimsy comes in play. In truth, nothing could be guaranteed until an actual application was made by the city or county; that application couldn't be made prior to one year before the event; and any money from the fund could only be paid to the city or county and after the event took place. In that light, it's probable that CoTA could have never seen, nor ever will see, any of that money. Combs seemingly overstepped her bounds by a large margin and later, when she was under threat of a legal investigation over the affair, tried to pretend like she'd never made any guarantees to begin with. Here...

That view is debatable. Combs said that COTA did not have a contract because the agreement with Hellmund expired. The intricate mechanisms of how the money would actually eventually be disbursed and the role Travis county played is a bit beyond this thread issue. Sufficient to say that the county agreed to the understanding/contract between METF and COTA on the condition that the counties tax was exempt from the plan and would be re reimbursed by COTA. This is why the failure of paying those $4m wrecked the scheme. All three parties were in agreement until the actions of the investors wrecked the plan in summer 2011. As you said it yourself Combs may even have been a bit over committed considering the actual political climate, but she would surely not have gone back on her words if she had not been presented with an excellent way out.

... Look, we're talking about legal assets here. It's really great that he got F1 eligible and that he got an apparently meaningless letter of commitment from Combs. But he had no ownership of those things - they don't mean anything legally. Nor does any of the other stuff he goes on about. The F1 rights? Sure. The MotoGP and Aussie rights? Maybe - I'm not so sure of the timing on those, but ok. But not what you are mistakenly calling 'intellectual' assets. Goodwill, perhaps? Maybe I could give you that.

No we are not talking legal values or securities here. Business potential and future profits would have been a big part of it. They must have meant a great deal because the were part of the valuation that led to assigning Hellmund 25% of the company shares. There is no point at all to denigrate the work done by Tavo and pretend that it wasn't a great business opportunity. The simple fact that Epstein & Co are still carrying out the scheme regardless of the the damage they have done to it's original value by their own incompetence or greed is testament to this.

[Pup]

WB, you keep taking that paragraph out of context. I've already explained to you twice and you just keep misrepresenting what I'm saying in order to feel like you've won something. Come on, man. You're above this.

As for Combs, what on earth is debatable? Combs didn't have the authority to do what she did. End of. I even gave you the statute itself, but you refuse to address it because you refuse to admit that you're wrong.

And to the last part, I don't know what you're smoking. Tavo didn't own the METF funds. They weren't his regardless of how valuable they may have been. Which wasn't much, since they were imaginary. Maybe CotA should sue him for that.

Hey, but go ahead and keep lauding him and his make believe millions. Get the last word in if you want. I know you'll argue this forever so I'm quitting now.

[bhall]

You're above this.

Meh.

[donskar]

What a waste of band width.

[FW17]

How come nobody has said about leaking insider information to Bernie.

If Tavo doesn't have the idea...if he doesn't act on it...if he doesn't lobby the Legislature, Kirk Watson, Susan Combs, Rick Perry, etc, that money would never have been available.

Horses got METF at Churchill Downs.

[WhiteBlue]

Pup, I don't mind you quitting, I was going to anyway after the last exchange. You have to have common concepts and language to execute a meaningful discussion and on the fundamental points of company law, valuation and writing a balance sheet of a company we don't seem to be talking the same language.

I reckon that eventually there will be a ruling by the jury though to tell us about the rights and wrongs of the acting persons in that drama. In the meantime I hope the thread will revert to the progress of the COTA preparing for the first race in Austin. At least I hope in the interest of the fans that it will come to that.

[bhall]

Horses got METF at Churchill Downs.

Really? 'Cause that's in Kentucky, and this is in Texas.

[FW17]

Horses got METF at Churchill Downs.

Really? 'Cause that's in Kentucky, and this is in Texas.

Meant the events in Fort worth