APBA LLC on the outs?
04-18-2003, 11:28 AM
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APBA LLC on the outs?
From the APBA website:
REPORT TO APBA MEMBERSHIP REGARDING TERMINATION OF LICENSE AGREEMENT WITH OFFSHORE LLCThursday, April 17, 2003Effective March 25, 2003, APBA terminated its License Agreement with APBA Offshore PowerBoat Racing, LLC ("Offshore, LLC") because of Offshore's refusal to pay the license fees long past due under that Agreement. Since then, APBA President Steve Hearn and Charles Strang have attempted to resolve this dispute through intensive discussions with Offshore, LLC's principal owners Michael Allweiss and Lee Mills. Those discussions were unsuccessful.
Consistent with the termination of License Agreement, APBA intends to sever all ties with Offshore, LLC and will insist that Offshore, LLC cease the use of the APBA name and other intellectual property and that Offshore, LLC pay all amounts past due to APBA. Races organized by Offshore, LLC will no longer be APBA-sanctioned or carry U.I.M. affiliation. APBA will re-establish an offshore racing category within APBA. Stanton Fitts has been appointed as Chairman pro-tem of that category to establish the operating organization, to create an Offshore Racing Commission and to establish rules and procedures for the management of offshore racing under the APBA sanction.
It is important to bring the APBA membership up to date about the background of these developments.
In February 2000, APBA entered into a License Agreement which permitted Offshore, LLC to conduct the operations of the APBA offshore category for the financial profit of Offshore, LLC's investors. APBA hoped that this arrangement would be beneficial to both APBA and to its membership. Offshore, LLC was permitted to use the APBA name and trademarks to promote its offshore events. Offshore, LLC agreed to make specific minimum annual payments to APBA in exchange for those rights. Then-APBA President Michael Jones and APBA Treasurer Greg Jacobsen established the financial terms of that Agreement, which was signed by Mr. Jones and by Michael Allweiss as President of Offshore, LLC. The Agreement was amended in January 2002, and the minimum amount of the annual payment by Offshore, LLC was increased to $212,000. That agreement was signed, just fourteen months ago, by Mr. Jones on behalf of APBA and by Mr. Allweiss on behalf of Offshore, LLC.
As set forth in the License Agreement, the annual minimum fee was computed by an analysis of historical and anticipated membership fees and sanction fees for the offshore category. When the offshore category's membership and sanction fees submitted to APBA for the 2002 fiscal year, which ended October 31, 2002, failed to meet the minimum amount required under the License Agreement, APBA wrote Offshore, LLC to request payment of the approximately $31,000 due APBA under that Agreement. APBA received no response. On February 10, 2003, Offshore, LLC was notified in writing that the 2002 amount due of $31,000 was still unpaid and given notice that failure to cure this default could trigger the termination provision of the License Agreement. APBA informed Offshore, LLC that it had failed to remit to APBA the membership fees collected at the November, 2002 Key West race, in an amount now known to be $49,000. Despite Offshore, LLC's refusal to pay that amount to APBA, APBA has honored 2003 memberships for those who paid their money to Offshore, LLC.
During this October 2002 through February 10, 2003 time period, Mr. Allweiss communicated with various APBA officers and directors and expressed his unwillingness to deal further with certain of those officers and directors. He repeatedly stated that the 2002 shortfall under the License Agreement would not be paid to APBA for a variety of reasons and demanded that the Offshore, LLC license fee be reduced to $1.00 per year. Through his own comments and those of legal counsel, he has threatened to sue APBA, its officers and directors, regarding a range of alleged actions, including those related to APBA's governance.
Suffice it to say that APBA has lived up to all of its obligations under the License Agreement.
Despite the March 25, 2003 termination of the License Agreement, Offshore, LLC has refused to cease using the APBA name and refused to pay the amounts due for 2002 and 2003. Because of Offshore, LLC's refusal to make its past due payments, APBA has withheld $22,000 in fees due Offshore, LLC under the License Agreement pending resolution of this dispute and has provided Offshore, LLC with a full accounting of those amounts. Offshore, LLC has also made unfounded claims that APBA has violated the License Agreement by:
· Sanctioning divisional offshore events without the approval of Mr. Allweiss. In fact, Mr. Allweiss did approve in writing the recent divisional offshore event at St. Cloud, Florida sanctioned by APBA.
· Attempting to influence members, sponsors, employees, investors, manufacturers and others to terminate their relationships with Offshore, LLC. This is patently untrue.
· Defaming and slandering Offshore, LLC and its officials. Another untrue assertion.
· Threatening to deny Offshore, LLC insurance required under the License Agreement. This is absolutely untrue. In fact, Offshore, LLC has unilaterally negotiated its own separate insurance contract and provided it to participants in the offshore category. That action by Offshore, LLC may leave the balance of the APBA membership with a significant revenue shortfall for meeting premium payments under APBA's existing insurance contract with ASIS.
On April 8, 2003, Steve Hearn and Charles Strang met in Charlotte with Mr. Allweiss and Mr. Mills, along with legal counsel for Offshore, LLC and APBA, to attempt to resolve these disputes. During that meeting, Mr. Allweiss objected to the financial terms of the License Agreement. He specifically objected to the fact that the membership and sanction fees for the offshore category were higher than those of other APBA categories - even though that was true at the time of the initial Agreement, was based on the "for-profit" nature of the offshore category, and was fully disclosed at that time. He also objected that the offshore category paid higher insurance premiums through APBA than other categories. Offshore, LLC's portion of APBA's overall insurance fees, however, like the membership and sanction fees, were properly determined and allocated by President Michael Jones and Treasurer Greg Jacobsen during their tenure.
Following the Charlotte meeting, Offshore, LLC submitted a written proposal to APBA which included:
· A demand of a cash payment of approximately $450,000 to Offshore, LLC;
· Re-writing Offshore, LLC's License Agreement to reduce the license fee from $212,000 to $25,000 per year; and
· A demand that APBA reduce its operating expenses in a fashion which would include selling the national headquarters building in Detroit, moving the headquarters elsewhere and reducing the staff to about one-fourth of its current size.
After countless hours expended by Mr. Hearn and Mr. Strang regarding possible settlement terms, after discussion with various APBA Board Members, and after the consideration of the lawsuits threatened by Offshore, LLC and Mr. Allweiss should APBA not agree to these demands, APBA has concluded that this dispute cannot be resolved within the parameters proposed by Offshore, LLC.
APBA, therefore, intends to initiate, or otherwise participate in, arbitration proceedings pursuant to the terms of the License Agreement and seek to have Offshore, LLC pay APBA all money due it under the terms of the License Agreement, and to have Offshore, LLC terminate its use of the APBA name, marks, logos and other intellectual property.
APBA appreciates more than you can know the widespread expressions of support and confidence that so many of you have provided in recent weeks. This is a time when the APBA membership must pull together to continue the one hundred years of tradition which has established and maintained organized racing for the benefit of thousands of powerboat enthusiasts
REPORT TO APBA MEMBERSHIP REGARDING TERMINATION OF LICENSE AGREEMENT WITH OFFSHORE LLCThursday, April 17, 2003Effective March 25, 2003, APBA terminated its License Agreement with APBA Offshore PowerBoat Racing, LLC ("Offshore, LLC") because of Offshore's refusal to pay the license fees long past due under that Agreement. Since then, APBA President Steve Hearn and Charles Strang have attempted to resolve this dispute through intensive discussions with Offshore, LLC's principal owners Michael Allweiss and Lee Mills. Those discussions were unsuccessful.
Consistent with the termination of License Agreement, APBA intends to sever all ties with Offshore, LLC and will insist that Offshore, LLC cease the use of the APBA name and other intellectual property and that Offshore, LLC pay all amounts past due to APBA. Races organized by Offshore, LLC will no longer be APBA-sanctioned or carry U.I.M. affiliation. APBA will re-establish an offshore racing category within APBA. Stanton Fitts has been appointed as Chairman pro-tem of that category to establish the operating organization, to create an Offshore Racing Commission and to establish rules and procedures for the management of offshore racing under the APBA sanction.
It is important to bring the APBA membership up to date about the background of these developments.
In February 2000, APBA entered into a License Agreement which permitted Offshore, LLC to conduct the operations of the APBA offshore category for the financial profit of Offshore, LLC's investors. APBA hoped that this arrangement would be beneficial to both APBA and to its membership. Offshore, LLC was permitted to use the APBA name and trademarks to promote its offshore events. Offshore, LLC agreed to make specific minimum annual payments to APBA in exchange for those rights. Then-APBA President Michael Jones and APBA Treasurer Greg Jacobsen established the financial terms of that Agreement, which was signed by Mr. Jones and by Michael Allweiss as President of Offshore, LLC. The Agreement was amended in January 2002, and the minimum amount of the annual payment by Offshore, LLC was increased to $212,000. That agreement was signed, just fourteen months ago, by Mr. Jones on behalf of APBA and by Mr. Allweiss on behalf of Offshore, LLC.
As set forth in the License Agreement, the annual minimum fee was computed by an analysis of historical and anticipated membership fees and sanction fees for the offshore category. When the offshore category's membership and sanction fees submitted to APBA for the 2002 fiscal year, which ended October 31, 2002, failed to meet the minimum amount required under the License Agreement, APBA wrote Offshore, LLC to request payment of the approximately $31,000 due APBA under that Agreement. APBA received no response. On February 10, 2003, Offshore, LLC was notified in writing that the 2002 amount due of $31,000 was still unpaid and given notice that failure to cure this default could trigger the termination provision of the License Agreement. APBA informed Offshore, LLC that it had failed to remit to APBA the membership fees collected at the November, 2002 Key West race, in an amount now known to be $49,000. Despite Offshore, LLC's refusal to pay that amount to APBA, APBA has honored 2003 memberships for those who paid their money to Offshore, LLC.
During this October 2002 through February 10, 2003 time period, Mr. Allweiss communicated with various APBA officers and directors and expressed his unwillingness to deal further with certain of those officers and directors. He repeatedly stated that the 2002 shortfall under the License Agreement would not be paid to APBA for a variety of reasons and demanded that the Offshore, LLC license fee be reduced to $1.00 per year. Through his own comments and those of legal counsel, he has threatened to sue APBA, its officers and directors, regarding a range of alleged actions, including those related to APBA's governance.
Suffice it to say that APBA has lived up to all of its obligations under the License Agreement.
Despite the March 25, 2003 termination of the License Agreement, Offshore, LLC has refused to cease using the APBA name and refused to pay the amounts due for 2002 and 2003. Because of Offshore, LLC's refusal to make its past due payments, APBA has withheld $22,000 in fees due Offshore, LLC under the License Agreement pending resolution of this dispute and has provided Offshore, LLC with a full accounting of those amounts. Offshore, LLC has also made unfounded claims that APBA has violated the License Agreement by:
· Sanctioning divisional offshore events without the approval of Mr. Allweiss. In fact, Mr. Allweiss did approve in writing the recent divisional offshore event at St. Cloud, Florida sanctioned by APBA.
· Attempting to influence members, sponsors, employees, investors, manufacturers and others to terminate their relationships with Offshore, LLC. This is patently untrue.
· Defaming and slandering Offshore, LLC and its officials. Another untrue assertion.
· Threatening to deny Offshore, LLC insurance required under the License Agreement. This is absolutely untrue. In fact, Offshore, LLC has unilaterally negotiated its own separate insurance contract and provided it to participants in the offshore category. That action by Offshore, LLC may leave the balance of the APBA membership with a significant revenue shortfall for meeting premium payments under APBA's existing insurance contract with ASIS.
On April 8, 2003, Steve Hearn and Charles Strang met in Charlotte with Mr. Allweiss and Mr. Mills, along with legal counsel for Offshore, LLC and APBA, to attempt to resolve these disputes. During that meeting, Mr. Allweiss objected to the financial terms of the License Agreement. He specifically objected to the fact that the membership and sanction fees for the offshore category were higher than those of other APBA categories - even though that was true at the time of the initial Agreement, was based on the "for-profit" nature of the offshore category, and was fully disclosed at that time. He also objected that the offshore category paid higher insurance premiums through APBA than other categories. Offshore, LLC's portion of APBA's overall insurance fees, however, like the membership and sanction fees, were properly determined and allocated by President Michael Jones and Treasurer Greg Jacobsen during their tenure.
Following the Charlotte meeting, Offshore, LLC submitted a written proposal to APBA which included:
· A demand of a cash payment of approximately $450,000 to Offshore, LLC;
· Re-writing Offshore, LLC's License Agreement to reduce the license fee from $212,000 to $25,000 per year; and
· A demand that APBA reduce its operating expenses in a fashion which would include selling the national headquarters building in Detroit, moving the headquarters elsewhere and reducing the staff to about one-fourth of its current size.
After countless hours expended by Mr. Hearn and Mr. Strang regarding possible settlement terms, after discussion with various APBA Board Members, and after the consideration of the lawsuits threatened by Offshore, LLC and Mr. Allweiss should APBA not agree to these demands, APBA has concluded that this dispute cannot be resolved within the parameters proposed by Offshore, LLC.
APBA, therefore, intends to initiate, or otherwise participate in, arbitration proceedings pursuant to the terms of the License Agreement and seek to have Offshore, LLC pay APBA all money due it under the terms of the License Agreement, and to have Offshore, LLC terminate its use of the APBA name, marks, logos and other intellectual property.
APBA appreciates more than you can know the widespread expressions of support and confidence that so many of you have provided in recent weeks. This is a time when the APBA membership must pull together to continue the one hundred years of tradition which has established and maintained organized racing for the benefit of thousands of powerboat enthusiasts
04-18-2003, 11:49 AM
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04-18-2003, 03:10 PM
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and no balls. Must be one of the wives, (or boyfriend) of one of those newsgroup guys. There are still a few pockets of al-quaida good-ole-boys in the APBA home office that just can't let it go. Either that, or somebody that works for Mercury...
APBA Offshore-LLC is alive, well, and strong as ever. Keep your reservations for Key West.
APBA Offshore-LLC is alive, well, and strong as ever. Keep your reservations for Key West.
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