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Monster Energy NASCAR Cup Series team BK Racing has filed for Chapter 11 bankruptcy, allowing the team to compete in the Daytona 500 this weekend while working towards a means to pay off at least $8 million in debt.

The filing on Thursday afternoon came less than an hour before a hearing on a request from Union Bank & Trust to appoint a receiver to take over the team’s assets, which include an ownership charter that guarantees the No. 23 a spot in every Cup Series event.

The bankruptcy filing halts all other court proceedings.

ESPN reported that BK Racing was facing a federal tax lien of more than $667,000 and owes the North Carolina department of commerce feeds of about $66,000 according to court records. In the bankruptcy filing, the team estimated its creditors as 50-99. The team also listed its assets as between $10-50 million and estimated liabilities as more than $10 million.

NBC Sports listed a partial list of creditors with the largest unsecured claims. BK Racing listed the following:

-$569,539.95 to Race Engines Plus
-$94,999.00 to Champion Tire & Wheel
-$72,507.22 to Moroso Performance
-$70,550.00 to Champion Air
-$62,303.63 to Enterprise Holdings
-$57,785.53 to Panki Racing Systems
-$49,367.17 to Simpson Performance Products
-$41,814.80 to Precision Products
-$35,072.46 to Harraka Racing Equipment
-The 20 creditors with the largest unsecured claims are owned a total of $1,235,493.27.

NASCAR has a means to strip a team of its ownership charter if it files bankruptcy but elected not to in the case of BK Racing. The sanctioning body provided Autoweek the following statement:

“We have a clear process around charter member governance. It is incumbent upon charter members to be ready to race and compete at the highest level. BK Racing remains the holder of the Charter.”

Gray Gaulding is set to drive the car this weekend during Daytona Speedweeks and said the proceedings has not been a distraction. Race Engines Plus’ Joey Arrington had sued team owner Ron Devine for the $647,084 he believes is owed, but is not allowed to reclaim any equipment under the Bankruptcy filing.

“Ron called me and told me that my job is the driver,” Gaulding said. “I don’t really know much of what’s going on. I know something went on in court and I hope it can eventually be a positive. This is the biggest race of my life, so I just need to stay positive and focus on my role, which is to drive the car.”

Matt Weaver

Matt Weaver

– Matt Weaver is an associate motorsports editor at Autoweek. Before becoming a journalist, he was a dirt track racer and short track cheeseburger connoisseur.

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