A St. Albert business says it will be forced to slash jobs and sell equipment after Edmonton Indy promoter Octane Motorsports Events Inc. failed to pay its bills.
Alberta Paramedical Services is out $54,721.38 and is one of five local businesses left coping with the financial loss.
“This is a major blow to us,” said Tim Hawirko, general manager. “I will have to lay people off, we’ll have to sell off equipment and we’ll have to downsize. This is significant.”
Octane Motorsports Events Inc. – the company behind the recently halted Edmonton Indy – filed for bankruptcy last month, leaving behind $112,271.18 in local debts.
The company filed for bankruptcy on Sept. 17 in Montreal with documents posted online last week.
When Hawirko received notice of Octane Motorsports’ bankruptcy filing, he said he was in the midst of planning for next year’s event.
“We were planning with them for next year, so we had no indication this was happening,” he said.
The company provided medical services leading up to and during the event in the form of first-aid rooms and ambulance services. Roughly 32 medical personnel were on site each day of the event.
Hawirko said he contacted a lawyer in hopes of recovering some of the owed funds, but was told he would have little chance of getting anything back.
The company provides ambulance services to major sporting events in the capital region and will continue to do so, he said.
Rudy van Woerkom, spokesperson for Racing Services Group, said his Sturgeon County company is owed more than the $15,000 that is noted in the documents.
The company was comprised of upwards of 2,000 volunteers with an interest in racing that helped with seating, preparation of the racetrack and other on-track duties.
Octane Motorsports paid the group a $15,000 honorarium annually in addition to expenses, which have yet to be submitted, van Woerkom said.
“That money in turn would be turned back over to the various organizations to help promote grassroots or amateur racing and participation within the region,” he said.
The group was formed solely to support the Edmonton Indy and will dissolve now that the event has been cancelled.
“It’s too bad that they chose to back out, however, I do understand it because the overall support for the event was quite limited in this part of the world,” van Woerkom said.
Daryl Zelinski, a former employee of Octane Motorsports, is owed $37,557.05. His Linked In profile lists him as the company’s sales and business development employee from March 2011 to September 2012.
“It’s frustrating and very disappointing and it’s sad that we lost the race and that we’re owed this money,” he said, adding he believes there will be some form of repayment. “It’s in the trustees’ hands right now and hopefully we’re going to get all or some of the money.”
He declined to comment further.
Hole’s and Decades Auto Body Ltd., both of St. Albert, are owed $2,367.75 and $2,625 respectively.
Octane Motorsports owes more than $5.3 million to 94 businesses across the country.
Shortly after filing for bankruptcy, Octane announced it was relinquishing its right to organize the Edmonton Indy, which ran for eight years.
“Despite our tight management policies and all our efforts to offer to the fans a world-class spectacle, we were not able to make this event profitable and nothing allows us to hope for a better profitability next year,” said a statement issued Sept. 21.
The statement also noted that Octane Motorsports Events Inc. would not make any more public statements. Phone calls to the company were not returned.
Octane Motorsports Events Inc. was one of four companies making up Montreal-based Octane. The remaining three, Octane Racing Group Inc., Octane Management Inc. and Octane Travel Solutions Inc. are still listed on the company’s website.
