It seems to be the latest craze. If you’ve ever dreamed of driving an exotic car the way it was built to perform, if you’ve ever had delusions that you could compete with a Formula One driver, or if you just think it would be a kick in the pants — you can do it affordably. At an increasing number of racetracks around the country, you can live that high-speed dream in a Ferrari 458 Italia, Lamborghini Aventador, a Porsche GT3 RS or many other modern high-performance exotic cars. To assure your safety, you are paired up with a professional instructor […]
It seems to be the latest craze. If you’ve ever dreamed of driving an exotic car the way it was built to perform, if you’ve ever had delusions that you could compete with a Formula One driver, or if you just think it would be a kick in the pants — you can do it affordably.
At an increasing number of racetracks around the country, you can live that high-speed dream in a Ferrari 458 Italia, Lamborghini Aventador, a Porsche GT3 RS or many other modern high-performance exotic cars.
To assure your safety, you are paired up with a professional instructor who will guide you around the track. Did I mention affordable? That is certainly in the eye of the beholder, but the going rate seems to be about $50–$100 per lap, based upon the car and location.
Those of us who race or track cars know that, in this corner of the universe, that really is amazingly affordable.
This “extreme experience” is touted as the ultimate thrill ride, a team-building exercise, a kick-ass vacation experience to remember and a way to live your wildest dreams.
All you need is a valid driver’s license, comfortable clothing, closed-toe shoes, and desire for an adventure. Helmets and insurance are provided. After 15 minutes or so of orientation, your assigned instructor takes you out on the track, and you’re living large.
Bad things can happen
Craig Sherwood, 37, a Canadian real-estate broker, was vacationing in Las Vegas last year when he decided to give this thrill a try at SpeedVegas. SpeedVegas had opened for business almost a year previously at their brand-new private racetrack just south of Las Vegas.
Sherwood chose the Lamborghini Aventador, and he was assigned 59-year-old Gil Ben-Kely as his instructor. For reasons unknown, the Aventador left the track at speed coming off the straightaway, crashed hard into the Turn 1 tire wall and erupted into flames. Both men died, their bodies burned beyond recognition.
Ben-Kely’s estate filed suit against SpeedVegas, the entity that owns the racetrack, the developer who built it, the track designers, and Automobili Lamborghini America. The lawsuit claimed negligence in the design and operation of the track, cars and program.
Shortly after, a second lawsuit was filed by Francisco Durban, another SpeedVegas instructor. Durban claimed that the SpeedVegas operations were dangerous because:
- The design of the racetrack was faulty because there were inadequate run-off areas and the concrete walls were too close to the track.
- The cars were not properly maintained.
- Drivers with inadequate experience were encouraged to drive.
Durban claimed that he narrowly avoided crashing when a brake pad fell off a Ferrari he was driving — an occurrence which happened more than once. He also claimed that the Aventador’s brakes were being worked on shortly before the crash, and that less-expensive replacement brakes were routinely substituted for the OEM brakes. He blamed such unsafe practices for causing five crashes at the track.
Brake issues
SpeedVegas acknowledged that it did replace the factory carbon-ceramic brakes on the Aventador, replacing them with an aftermarket two-piece aluminum and cast-iron brake rotor assembly manufactured by Girodisc. The explanation given was that the Girodisc brakes were better than the stock brakes in the continuous high-speed braking environment presented at the track.
No one seems to have responded to the claim about brake pads falling off the cars. I can’t say that’s impossible, but in all my years of driving and racing, I’ve never heard of that happening.
OSHA investigates
Since an employee died, the crash triggered an OSHA investigation. OSHA fined SpeedVegas for several safety violations, such as failure to provide adequate training to the fire-safety personnel, inadequacy of fire extinguishers and the lack of adequate written safety policies. However, the OSHA report made clear that none of the violations was believed to have contributed to the crash or the deaths.
The report also made clear that the OSHA investigators really didn’t know anything about automotive brake systems. Moreover, there were no state or federal policies that governed brake systems, so there was nothing for them to evaluate with respect to compliance.
Everyone jumps in
Exotics Racing is the largest SpeedVegas competitor in the Las Vegas area. Its founder, Romain Thievin, appeared on local television to criticize the SpeedVegas safety issues caused by inadequate run-off areas. Thievin was filmed at his racetrack, where he pointed out its large gravel run-off areas. Not knowing the background, we assume Thievin was protecting his own company from adverse publicity and not trying to kick SpeedVegas while it was down.
In a surprising development, three SpeedVegas creditors filed an involuntary Chapter 11 bankruptcy petition against SpeedVegas, alleging they were owed money and were not being paid. The creditors were the previous owner of the Aventador, the owner of the land the racetrack is built upon and the construction company that built the track. SpeedVegas responded to the petition by agreeing to convert it to a voluntary bankruptcy.
A Chapter 11 bankruptcy is commonly referred to as a “reorganization” bankruptcy. The debtor company’s debts are reorganized, meaning they are preserved, compromised, discharged, or a combination thereof — as necessary to keep the company in business.
Creditors can force the bankruptcy in certain conditions, and a trustee is appointed to manage the process. In a voluntary filing, the debtor company remains in control of its business operations and proposes the debt reorganization plan. Generally, maintaining control is greatly preferable for the company and its owners.
I don’t want to get deep into the bankruptcy rules and process, but in a very general sense, a company’s debts are divided between secured and unsecured debts. The secured creditors get the benefit of their security. The unsecured creditors generally share what assets remain — in proportion to the amounts of their claims. Those priorities are then blended into a “reorganization plan,” which usually involves the company making payments over time, spread among the various creditors based upon their priorities.
This procedure may have given SpeedVegas a negotiation advantage. When faced with the prospect of the company going out of business, creditors often negotiate settlements that allow the company to remain in business. But sometimes they don’t, and the Chapter 11 bankruptcy is converted to a Chapter 7 — liquidation — bankruptcy.
In the Chapter 7 process, all company assets are sold off, the proceeds spread among the creditors, and that’s the end of the story. Faced with that potential outcome, a Chapter 11 debtor often has strong negotiating leverage over creditors.
Whether that was how it worked here or not, SpeedVegas may have turned the corner. Both the Ben-Kely and Durban lawsuits have been settled on undisclosed terms. There is no news about a lawsuit being filed by the Sherwood estate. SpeedVegas is in full operating mode. However, the bankruptcy proceeding is still under way as, once started, these things can take a lot of time.
Déjà vu?
This case bears some similarity to the Legal File reported several years ago, when a Porsche Carrera GT crashed at California Motor Speedway. However, there are some striking legal differences.
The Carrera GT crash occurred at a track day, where all participants gave releases to the organizers and other participants. The participants are all experienced to some degree, they are on their own, and they knowingly assume the risk of a highly dangerous activity.
The SpeedVegas case is quite a bit different, as the track operator is engaged in the business of providing these rides for its customers — such as Sherwood.
That puts the burden on the operator to make the activity as safe as possible. The track design, coaching, car condition and so on are all the responsibility of the track operator. It seems doubtful that a customer, especially an inexperienced one, can give a legally effective release.
The track is also a place of employment for the instructor. As an employee, Ben-Kely was entitled to be provided a safe working environment.
Employees cannot bargain away those rights under the law, no matter how much they may be willing to do so. Of course, the employer does not have to make working at the track as safe as working in an office — the nature of the work activity clearly factors in.
A good idea?
As for the wisdom of the whole thing, that’s hard to say. It may well be that the majority of customers at these “experiences” have no business being on a racetrack in these cars.
But, to be realistic, these customers may not go fast enough to overcome the amazing, state-of-the-art safety systems in these supercars. Those systems, together with the instructors, may do the trick for the inexperienced drivers.
But when the more-experienced drivers go so fast that errors can overcome these driving aids, all sorts of bad things can happen. ♦
JOHN DRANEAS is an attorney in Oregon. His comments are general in nature and are not intended to substitute for consultation with an attorney. He can be reached through www.draneaslaw.com.