GEM agrees to drop lawsuit as merger plans are terminated

Gillett Evernham Motorsports and Robby Gordon Motorsports announced on Friday that they have ended plans to merge, nearly eight months after a tentative merger agreement was first struck.

As part of the dissolution, GEM agreed to drop its lawsuit against Robby Gordon Motorsports. GEM had filed the suit in late August as more issues arose over the merger plans.

A news release from GEM stated in part: "Management personnel for the two teams acknowledge that there were misunderstandings, but both sides acted in good faith throughout, and in the end it was circumstances beyond their control that caused the merger not to proceed."

On Friday, Bill Davis declined to comment on whether he is negotiating to sell his Sprint Cup team to GEM.

Reports last week indicated GEM was looking to merge with Bill Davis Racing in order to expand to four teams, and that GEM was contemplating a move to Toyota, which Dodge officials strongly denied.

Under the tentative agreement from Jan. 29, Gordon was to have sold his team to GEM for $23.5 million. Gordon would then have a four-year driving deal with GEM, worth $3 million annually, plus 45 percent of race winnings.

According to the lawsuit, as originally reported by NASCAR Scene, GEM was pursuing efforts to close the deal. The contract includes an exclusivity clause, which GEM claims would not allow Gordon to entertain talks with other teams about possible mergers. In May, Gordon asked out of the deal, according to the lawsuit, in exchange for an engine deal for the remainder of the season.

The exclusivity clause was the primary basis for the lawsuit, filed Aug. 25 in North Carolina Superior Court in Charlotte. In court documents, GEM claimed that Gordon had talked to other teams about merging.

Information from ESPN.com NASCAR writer David Newton was used in this story.