IndyCar will contribute $925,000 as part of settlement for canceled Boston Grand Prix

IndyCar will contribute $925,000 to help satisfy the $1.678 million owed to ticket buyers of the now-canceled Boston Grand Prix. Race organizers, meanwhile, now face a lawsuit from the Commonwealth of Massachusetts.

On Thursday, Massachusetts Attorney General Maura Healey announced the IndyCar settlement and the filing of a lawsuit against Boston Grand Prix and its CEO, John Casey. The lawsuit seeks restitution for ticket buyers.

Boston Grand Prix filed for bankruptcy Tuesday, listing all the people owed money and stating it only has $10,909 in its bank accounts, two show cars worth approximately $50,000 and 120 concrete barriers worth an unknown amount.

The state lawsuit filed Thursday alleges that when tickets went on sale in March, Casey knew he still needed to obtain permits to comply with the Seaport District flood plan in order to have the race. The confirmation that came with the ticket sales guaranteed a refund if the event was canceled.

The race was officially canceled April 29, and Boston Grand Prix had sold tickets to more than 4,000 people worth $2,086,798. It was able to send out approximately $400,000 in refunds.

"Boston Grand Prix and its CEO knew full well when they marketed and sold this event that they didn't have the resources or permits to make it happen," Healey said in a news release. "They failed to protect consumers, and we will do all we can to hold them accountable."

Healey also threatened to sue IndyCar prior to its agreement to pay $925,000 toward the $1,677,894 remaining that needs to be refunded.

"I appreciate IndyCar's willingness to step up for their fans and help resolve this problem," she said. "They've gone above and beyond to be a productive part of this solution, and their fans will reap the benefits."

Boston Grand Prix said in its bankruptcy filing that it prepaid IndyCar $487,500 for the race. IndyCar says it is owed as much as $4.2 million.

"We want our fans to know that we share their disappointment that the race won't take place," said Mark Miles, CEO of IndyCar parent company Hulman & Co. "And we also want to join them in expressing our appreciation for Attorney General Healey's work on their behalf."

The state lawsuit against Casey and the BGP asks for a $5,000 fine for each violation of state law. With a potential of approximately 4,000 violations, that theoretically could equate to close to $20 million. The lawsuit claims that Casey should have held the ticket money in trust or have a mechanism to provide full refunds.

"Casey knew by the time advance ticket sales began on March 11, 2016 that BGP had not secured all the necessary approvals and that BGP owed money to vendors," the lawsuit alleges. "He knew that BGP would have to pay the balance due on contracts with INDYCAR and the [Massachusetts Convention Center Authority] as well as costs that the venture continued to accrue in preparation for the race.

"Despite knowing BGP had these outstanding financial obligations, Casey allowed BGP to write checks to himself and to make direct payments to third parties that appear to be of a personal nature."