-----Original Message-----
From: Sheck94@aol.com [SMTP:Sheck94@aol.com]
Sent: Tuesday, May 13, 1997 9:07 AM
To: vintage-race@Autox.Team.Net
Subject: Response to the open Letter...
[Pat Ryan] My reply is long, tedious and boring, especially if you are =
not an SVRA member. Please forgive this intrusion on a public list, but =
it is a complicated matter and there are no short answers. This =
concerns a possible ownership change in SVRA and only frequent SVRA =
racers should be concerned. Most non-racing members and once a year =
racers aren't even aware of the six ownership changes in the last 10 =
years and that is as it should be. None have significantly changed SVRA =
and this one won't either. One difference is that the members didn't =
know about the others until after they happened. I have broken this =
response into two parts.
Please post the following letter on the Vintage-Race web forum:
Response to the Open Letter
Members and Friends of SVRA
I recently received a copy of the letter authored by Pat Ryan, and I =
assume
with the consensual approval of Carl Jensen and David Whiteside, in =
which a
plan of acquisition is described. A group we are led to believe to be
"Friends of SVRA" would divest the controlling interest from a few =
people and
give it to many. We are further to believe that the new company would =
be
made up of SVRA members in good standing, representing a cross section =
of all
the membership. [Pat Ryan] This is a critical part of the plan. The =
proposed contract of sale, yet to be approved by the current owners, =
stipulates that all existing members and ex-members will be given an =
opportunity to buy a share at a price yet to be determined.=20
Also, that the funds for this acquisition would come from
selling "Charter Memberships" granting these select owners voting =
privileges=20
[Pat Ryan] Select is correct in that they select themselves.=20
formerly restricted to the current owners and management=20
[Pat Ryan] What they get for their investment is the right to elect a =
five member board from their own ranks...... implicit in
the text of the letter is that the current membership has no voice in =
the
decision making processes, and this represents the driving force to push =
for
the restructure of the company.=20
[Pat Ryan] The company is currently run by four equal owners on one =
board who often split two against two. It is correct that the current =
membership has no voice in the decision making process.=20
On the surface this appears to be a plan with merit. Indeed, an =
offering of
new direction and opportunity for all members, from all walks of life, =
to
share not only in ownership of prestigious and recognized racing =
organization
but to have a voice in how that company would be run. And, I must =
admit,
when I first heard about the concept I got excited at this prospect. In =
fact
I spoke to Pat at some length at Roebling and expressed an interest to =
him to
be put on the list of people that would be sent more detailed =
information
relative to the prospected plan.
[Pat Ryan] I told you at the Savannah event that everyone would get =
detailed information once the sale had been agreed to by the current =
owners. You and every other member will get this information if and =
when they agree to sell under some terms. =20
As a facilitator to both sides, one of my responsibilities was to survey =
enough members to determine if there would be enough investors to pay =
the owners a reasonable price for their equity and have enough left for =
a comfort level to operate the club. Also we needed to know that there =
would be a large enough number of investors to be truly democratic. We =
asked several frequent competitors if they liked the idea and that if =
there was an opportunity would they be likely to invest =20
You approached me and got the details and I gave you a rough idea of the =
probable amount of the investment and you said you wished to be an =
investor. I added your name to 30 or so others surveyed who had =
expressed such an interest at that price level. =20
As I told you then, we had already surveyed enough members to be =
confident that there would be enough money and had stopped surveying. =
We did not then and have not since asked anyone to invest in anything. =
.There was no sense in surveying more potential investors until we knew =
if we had willing sellers.
However, time passes and the picture becomes clearer as more colors and
details are filled in. What I am now seeing and hearing in discussions =
with
other SVRA members, as Paul Harvey says, is the rest of the story. This =
is
not about involving the general membership but offering special =
privileges to
an elite group of selected participants. [Pat Ryan] I don't understand =
this, what elite group?
First, you would need to qualify and quantify that you have the =
financial
profile that affords you the option to buy in. [Pat Ryan] This makes =
no sense. If you mean you must have the necessary cash available I =
guess that is what it takes to qualify. Granted, not every vintage =
racer will be able to afford this but most will.
Secondly, you must be in the group of members that can take time away =
from your careers to attend more
than seventy-five percent of the scheduled events. [Pat Ryan] This =
makes no sense, where did this come from?
And then, these people who could well afford to support the costs =
inherent with attending nearly all
of the events would be afforded the opportunity to race for free for =
life as
a result of becoming a Charter Member. [Pat Ryan] Boy, is this out of =
left field. What is proposed is that for an investment in a =
transferable Charter Membership you get to vote once a year to select =
the five directors who decide what SVRA will be. You also get free =
membership for life. Nothing has ever been discussed about reduced =
entry fees for Charter Members.
=20
Where is the logic in this? Supposedly this up front money from the sale =
of Charter Memberships is to be
used in part to secure more and better management=20
How do the current owners get compensated for the sale of the company? =
[Pat Ryan] From the proceeds of the sale of charter memberships.
And we are not told what the selling price may be. [Pat Ryan] Before =
anyone is asked to invest they will see the new Charter, the board =
structure, the price, the details. The reason you have not seen them =
yet is because the owners have not approved anything yet. First they =
must sign a contract of sale and state the terms under which they will =
sell. They are very concerned with the Charter. They don't want to see =
the basic SVRA principles changed. Nor do we. Nor do the investors we =
surveyed. =20
=20
[Pat Ryan] Most of the above seems to be bits and pieces of third or =
fourth-hand information distorted in the way the message gets changed =
when children whisper around in a circle. Not your fault, Jim. Anyone =
has had access to the plan simply by calling me or David and asking. I =
wish you had. Our whole concept is based around the fact that in the =
new SVRA organization there would be no secrets. .Yes, there will be =
two classes of members, owner-members (voting members) and regular =
members. Regular members should see little change, if anything their =
costs should go down, voting members will have no significant incentives =
other than the right to select their leaders.=20
The conjecture is that there would be up to thirty Charter Memberships =
that
are offered at $10,000 each. [Pat Ryan] Wrong. Minimum 50 Charter =
Memberships, there were 30 interested when we spoke.
- That these would be equity shares in the
company and would be very limited position. =20
[Pat Ryan] Wrong. Unlimited in number. The more the better.
I know of these details because Pat Ryan told me of this concept. Not =
only was I exempted from the mailing=20
[Pat Ryan] There has been no mailing, what mailing were you exempted =
from?=20
but my name was erroroniously used in a document presented to the =
current
owners as being financially committed to the buy out. This is =
representative
of a completely unethical and fraudulent method of operation, and not =
what I
would wish to reflected in the new ownership of our organization. [Pat =
Ryan] When you flagged me down at Savannah I told you that it seemed =
that a $10,000 price was comfortable to most of the people we had =
surveyed and would probably be the amount in our proposal to the current =
owners. Remember, there is no price determined currently and that is =
why it is not mentioned in my "open letter". You told me you would be =
interested in investing after I gave you that number. I have already =
explained why your name was on a list. No representation has been made =
to anyone of a financial commitment by anyone. All surveyed were given =
a what-if scenario. One expects that if the owners offer to sell under =
terms projected in the scenario that most of those people will invest =
when offered the specifics and the opportunity. One also expects some =
will change their minds. No one expects anyone to make a financial =
commitment until they have the specific details in writing. You were in =
a hurry, so was I, we were talking through the window of a car. I am =
sorry if you misunderstood these points, I probably wasn't very clear.
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