AHRMA ReorganizesTuesday, November 14, 2006 | 10:47 AM
• AHRMA has been defending itself for over 5½ years in a groundless lawsuit filed in federal court by Mr. Robert Iannucci and Team Obsolete. When we filed our claim with our insurance carrier (Reliance), we discovered it was insolvent in the largest insurance bankruptcy of its type in the country. AHRMA was able to secure coverage from the Wisconsin insurance insolvency fund that covered $300,000. It was anticipated this would cover the cost of the case. The fund has been exhausted. After five amended complaints, 245 docket entries, protracted discovery disputes and other procedural shenanigans, we remain confident that we are absolutely not liable in this case. AHRMA has done nothing wrong.
• However, the costs of defending this action have been staggering, and have far exceeded estimates on which we relied.
• Although we are very confident of victory in the case, we do not have sufficient funds remaining to pursue the case in court.
• Settlement negotiations were conducted earlier this summer, but were unsuccessful within the resources available to us.
• In order to preserve our remaining resources, maintain the integrity of the association, and further the interests of our members, we have filed a petition under Chapter 11, which is the reorganization chapter of the U.S. Bankruptcy Code. This should be familiar to many of our members as we routinely see major U.S. airlines continue to operate and successfully emerge from Chapter 11, and continue to improve their operations. As with airline passengers, members of AHRMA will see no adverse affects.
• The filing of this petition will immediately stay the lawsuit, and pending reorganization, no further claims in the original case can be brought against the association.
• All AHRMA operations will continue with full 2007 Road Race, Off Road and Dirt Track Schedules
AHRMA further intends to take this opportunity to revamp and modernize services, as we clear the burden of the lawsuit, and emerge as a stronger association.
—AHRMA Board of Trustees
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