NASCAR: Hillman sues former partner over charter

Hillman Racing owner Mike Hillman and his partners Doug Fuller and Matt Miller have filed a lawsuit against former partner Joe Falk, Circle Sport, Leavine Family Racing and Circle-Sport Leavine Family Racing over ownership of the No.33 team, including its charter entry.

Hillman is also seeking a financial settlement, as well as all of the profits and benefits associated with Circle Sport-Leavine Family Racing's No.95.

Falk and Hillman partnered to run the No.33 in Sprint Cup under the Hillman Racing banner from 2012 until the end of last year, when Falk merged Circle Sport with Leavine Family Racing. The No.33 went into the new team as part of the merge along with Leavine Family Racing's No.95, which became the primary entry and effectively inherited the No.33's charter and related perks.

Hillman Racing retained its No.40 that had been part of the previous Hillman/Circle Sport partnership, however did not receive charter status because it had not fulfilled the requirement of competing full-time between 2013 and 2015.

According to court documents obtained by NBCSports.com, Hillman Racing was unable to field a second car during 2012 because Michael Waltrip's run in the No.40 at Daytona constituted a fourth MWR entry under NASCAR's rules at the time.

Falk's formation of Circle Racing was intended as a workaround to allow Hillman and Falk to run the No.33, whose points they had bought from Richard Childress Racing. Under the arrangement, the complaint says, winnings from the No.33 would initially be used to repay the $100,000 sale price to RCR, and any leftovers would be directed towards helping to cover Hillman Racing's operating expenses.

The complaint goes on to state that over time, Hillman purchased equipment and parts on Circle Racing's behalf, and secured sponsors for the No.33 car. It says that the first fractures in the partnership appeared toward the end of 2014, due in part to Falk's failure to contribute adequately to the car's operation.

The No.40 became the team's main entry in 2015, and the No.33 was leased back to RCR for several races.

The complaint goes on to allege that Hillman discovered that a sponsor check for last year's Daytona 500 was made out to Circle Sport instead of Hillman Racing in apparently contravention of Hillman and Falk's agreement. They agreed to part shortly afterwards.

A purchase agreement written on behalf of Hillman Racing in March of 2015 for the transfer of the team's assets, including the No.33's points, was not signed by Falk, and Hillman did not respond to a subsequent email from Falk stating that he wanted to own the No.33's points outright once the season was over.

In October, Hillman was made aware that the terms of NASCAR's charter agreement had been locked down, and that the No.33 would receive charter status but the No.40 would not.

Falk was informed of the No.33's charter status because Circle Racing was the car's formal owner, and he entered into his new merger with Levine Family Racing in January of this year – an arrangement that Hillman's complaint says took he and his partners by surprise.

"As a results of the circumstances described ... the 40 points are of negligible value, the Partnership is unable to race full-time during the 2016 race season, Hillman and Hillman Racing have no ability to pay for the significant debt incurred in the 2013, 2014 and 2015 race seasons, and the remaining partners have been forced to liquidate many of the Partnership's remaining assets," NBC Sports quotes the complaint as stating.

Hillman made an unsuccessful attempt to field Reed Sorensen at Daytona, and has not appeared at a Cup race since.