More financial problems for SpeedVegas?

LAS VEGAS - Pressure continues to build for a luxury car track turned location of a deadly wreck. SpeedVegas has faced lawsuits, an OSHA investigation that resulted in fines and an extremely rare involuntary petition for bankruptcy. Xenophon Peters is the partner at Peters and Associates. Peters says, "just being here for 10 years, I don't think I've ever seen an involuntary petition against a big business."

Peters says this chapter 11 petition aims to reorganize company debt within SpeedVegas so money can be repaid. Peters says, "to file it, you would have had to have gone through the normal course of trying to collect on your debt and you're just getting no where. There's also a rational of trying to stop the transfer of assets."

In this type of filing, SpeedVegas has 20 days to respond. Peters, who's not associated with the case, says it's likely the company will object. Otherwise, the case would be automatically approved. Should SpeedVegas respond, the next step would be to go in front of a bankruptcy judge.

Peters says, "if they feel like the business is just going to shut down because of these other claims, that they're not going to be able to pay, then maybe these creditors want to try and get their money as quickly as possible. If it's uncovered that there was no mismanagement of funds and the debt hasn't been grossly mismanaged, they could always be liable for the attorney fees that SpeedVegas has paid to defend this."

Overall, it's the speed of this rare petition that could be motivating creditors or the fear that SpeedVegas could end up filing chapter 7 bankruptcy later on down the road.

However, Peters says it's also an opportunity for the company to restructure funds and pay off their debts if possible. Peters says, "there's a good chance SpeedVegas recovers from this."

 

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