AMA announces settlement of Edmondson litigation

A01028


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                AMA announces settlement of Edmondson litigation

     PICKERINGTON, OHIO -- The American Motorcyclist Association (AMA) and Roger

Edmondson have agreed to an out-of-court settlement in a case regarding the

AMA's professional road-racing program.

     The original lawsuit, filed in 1996, arose from the termination in 1994 of

contracts under which Edmondson functioned as manager for the AMA's national

championship road-racing series and administrator for several classes included

in that series. At the time of his departure from those positions, the AMA

entered into negotiations with Edmondson and made a financial offer to terminate

the relationship.

     Those negotiations were unsuccessful, and Edmondson ultimately formed the

North American Sport Bike series, signing contracts with several racetracks that

had previously hosted AMA road races. Subsequently, most of those racetracks

terminated those contracts and returned to the AMA schedule.

     Edmondson then sued the AMA, alleging that the Association had interfered

with his racing program. In 1998, he received a judgment in federal court in

North Carolina in which the AMA was ordered to pay damages that, with interest

and attorney fees, would total well in excess of $3 million. The U.S. Fourth

Circuit Court of Appeals in Richmond, Virginia, subsequently reviewed that

ruling and sent it back to the lower court to correct mistakes in several areas.


     A new trial in the case was scheduled to take place in July, but the two

sides reached a settlement agreement June 7 that ends the litigation and

resolves the disputes between them. Under the terms of the settlement, the AMA

has agreed to pay Edmondson $3 million.

     "This agreement concludes a case that was based on business dealings that

took place many years ago," said Rick Gray, chairman of the AMA Board of

Trustees. "As we looked ahead to the prospect of a third legal review of this

matter, we decided to make a very difficult decision and bring this litigation

to a close.

     "Our efforts to settle this matter when it first arose were unsuccessful

and resulted in the lawsuit," Gray added. "The amount we have offered in

settlement, though large, is substantially less than that which was originally

awarded, when interest, counsel fees and the portion of the judgment affirmed on

appeal are factored in. Moving forward from this settlement, the AMA's staff and

trustees will continue to fulfill our primary mission ? protecting

motorcyclists' right to ride."

     The entire amount of the original judgment and interest was budgeted by the

Association and set aside when the original ruling was handed down. Since then,

the AMA's Board of Trustees has continued to review and revise policies

concerning the way the Association enters into contracts with those providing

services.

     "Through this protracted litigation, the AMA's trustees and staff have

resolved to continue their work to protect the Association from situations like

this," said Gray. "In today's litigious climate, it's virtually impossible to

avoid lawsuits, but the Association has taken steps to guard against a

recurrence."

     While the case has continued, the AMA has moved forward with its

competition program, creating a professional racing subsidiary under the

direction of a separate board. In all forms of racing, the Association has

attracted new sponsors, increased rider payouts, expanded the fan base and

substantially upgraded television coverage.