The Grand Prix of Denver announced Thursday that Bridgestone is replacing Centrix Financial as the race’s title sponsor. Scheduled for Aug. 11-13 in downtown Denver, the event is now billed as the Grand Prix of Denver sponsored by Bridgestone.
The announcement continues a bumpy ride for motorsports enthusiast Robert E. Sutton, owner and chief executive of Centennial-based Centrix.
Sutton bought the Grand Prix in 2004 at a time when Centrix’s subprime auto-loan business was booming and its workforce was surging.
Last year’s race attracted more than 148,000 fans over three days, and Centrix pumped “several million dollars” into the event, Sutton said at the time.
But now five Centrix investors are suing the privately held company, its subsidiaries and Sutton for fraud. Centrix concealed financial records and set up a number of subsidiaries to hide its substantial revenue growth from 1998 to 2004 and deprive the investors of their “equity and profit-sharing interests,” according to the lawsuit filed June 14 in Arapahoe County District Court.
In 2004, Sutton withdrew $5 million from Centrix to help pay personal income taxes – and kept investors in the dark about the transaction, the suit claims.
Centrix referred questions to general counsel Michael Connolly, who said this week that the company will “vehemently defend against” the lawsuit.
“We strongly deny the allegations,” Connolly said.
Centrix and its subsidiaries suffered a serious downturn in their business in 2005 and “may be undercapitalized or insolvent,” according to the lawsuit.
The company has attributed its struggles to tighter regulations that prevent credit unions from using intermediaries such as Centrix to provide auto loans to borrowers with impaired credit ratings.
Centrix went through three rounds of layoffs in the past year, cutting its metro Denver workforce from 1,500 to about 700.
In their lawsuit, Douglas Burke, Joseph Burke, Rosemary Burke, Dwight Kjederquist and Lynn Svoboda say they invested a total of $125,000 in Centrix in 1998. Sutton bought the company in 1997.
They claim they have never received any profit-sharing distributions even though the company has underwritten more than 250,000 loans totaling more than $4 billion since 1998.
Meanwhile, from 2003 to 2004, Centrix distributed $6.75 million to other investors or executives, including the $5 million to Sutton, the suit alleges.
Centrix is facing several other lawsuits, including two filed this year in Arapahoe County.
Thomas R. Bollum, a former executive who left the company in 2005, is suing for $1 million in unpaid severance. National City Vendor Finance, which leased office equipment to Centrix, is suing the company for breach of contract and is seeking $530,280.
Connolly declined to comment about those suits.
Centrix is still billed as the “official auto finance company of NASCAR.”
While Centrix is no longer the title sponsor of the Grand Prix, Sutton remains co-owner. This month, he sought help from the Champ Car World Series – which sanctions the Grand Prix – to ensure that the race would be held this year.
Champ Car agreed to help finance the event in exchange for an ownership stake in the race.
Bridgestone has been the official tire sponsor of the event since its inception in 2002.
Staff writer Andy Vuong can be reached at 303-820-1209 or avuong@denverpost.com.
