Stewart-Haas Racing filed a lawsuit in North Carolina Superior Court on Friday, suing sponsor Nature’s Bakery for breach of contract. The news was first reported by the Associated Press.
After looking through a copy of the lawsuit, here are some takeaways of interest:
— SHR was skeptical from the start Nature’s Bakery would be able to pay the bills. During the initial negotiations, SHR said it “expressed significant concern that Nature’s Bakery would be unable to afford a primary sponsorship of the magnitude it requested.” But Nature’s Bakery owner David Marson “provided repeated assurances” the company had enough cash to pay the $15.2 million per year sponsorship through 2018.
— Before last season even started, Nature’s Bakery told SHR it was having cash flow issues and requested to modify the payment due dates. So instead of big payments like $5 million and $3.4 million, SHR spread out the payments into smaller increments like $2.5 million and $1 million.
— SHR received a letter in December in which Nature’s Bakery claimed Patrick was endorsing competing products (she sometimes posts photos of protein powder, but SHR contends that’s not a competitor to fig bars). Nature’s Bakery also claimed Patrick didn’t endorse its products enough on social media. At the end of the letter, Nature’s Bakery said it needed to transition out of its sponsorship and SHR would need to find a new sponsor for 25 races this season. The letter “shocked” SHR, which was already well down the road of preparing for 2017.
— As part of the lawsuit, SHR included dozens of Patrick’s Instagram posts which were “liked” by Nature’s Bakery (including the protein powder ones). The lawsuit contends Nature’s Bakery was totally fine with Patrick’s posts (and demonstrated so publicly) until it became necessary to create an excuse to terminate the sponsorship.
— SHR is suing for more than $31 million, which includes the cost of the sponsorship for the next two seasons. Nature’s Bakery has already missed payments of more than $1.3 million and would be even more if SHR hadn’t modified the agreement.
— In a statement, SHR said it is committed to running the car regardless of sponsorship this season:
“Nature’s Bakery is in material breach of its contract with Stewart-Haas Racing. It is an unfortunate situation, as the team has delivered on all aspects of its contract and was prepared to do so again in 2017. Ultimately, this is a situation that will be resolved in a court of law.
“Stewart-Haas Racing remains focused on its preparation for the 2017 NASCAR season where it will again field four entries in the Monster Energy NASCAR Cup Series while also introducing a full-time NASCAR Xfinity Series team. The litigation with Nature’s Bakery will not impact the organization’s on-track efforts.”
Danica Patrick won’t be driving this car any longer. (Photo courtesy of NASCAR)