Tavo Hellmund, the mastermind who first dreamt of bringing Formula 1 to Austin, has reached an out-of-court settlement in his lawsuit against Circuit of the Americas (COTA) investors Bobby Epstein, Red McCombs and other management companies involved in the multi-million dollar venture.
Details of the settlement were not disclosed.
The agreement was reached on June 8, just days before the scheduled June 11 court hearing to decide if Hellmund’s case would be heard or go to arbitration.
A longtime friend of Formula 1 chief Bernie Ecclestone, Hellmund had always wanted to bring the race to Austin. After initially pulling Ecclestone on board, Hellmund created a partnership with Epstein and McCombs to form Accelerator Holdings and begin construction of the track.
It was reported that Hellmund offered Epstein and McCombs 75 percent of his endeavor in an agreement that would make him chairman of the United States Grand Prix under a 10 year contract.
In March 2011, it was reported that McCombs and Epstein failed to raise $190 million in construction funds. Later in July, they were again reported to have failed to provide the $4 million required to secure a sports fund subsidy from the state.
State comptroller Susan Combs announced that the $25 million Major Events Trust Fund subsidy would be made available only after the first Grand Prix, contrary to previously agreeing to make the funds available prior to the new track’s first event.
Construction of the Circuit came to a halt and the project began to fall apart.
As the rift widened between Hellmund and Epstein, Ecclestone gave the partners an ultimatum: decide on a solution before the FIA World Motorsport Council met to approve the 2012 race schedule. If no solution was reached before the Dec. 7 meeting, the track risked being removed from the 2012 schedule with no chance to be added back on.
Just hours before the meeting, Ecclestone announced their new contract directly with COTA and the track held on to its 2012 race date. It was later found that McCombs and Epstein’s new contract cut Hellmund’s involvement and management with the project.
In March 2012, Hellmund sued Epstein and McCombs for breach of contract claiming his partners failed to meet their financial commitments, he had not been paid since September, and was still a part of the management team.
In response, Epstein alleged that Hellmund had violated the terms of his contract with Formula 1 saying he had failed to fulfill his agreements.
Hellmund later admitted his company, Full Throttle Productions LP, had been in breach of its contract with Formula 1 Management since May 2011.
By early June, Hellmund reached a settlement agreement with COTA out of court, the terms of which were not released.
The Circuit is back on track to prepare for its first race day, the Formula 1 United States Grand Prix, on November 18, 2012.
