Chapter 11 and Sponsorships

[Lastlap]

When a company files for Chapter 11 Bankruptcy, what happens to sponsorships that are currently in place?

Are payments stopped? Do logos remain on the car? Are they removed? Is it a case by case basis?

Thanks for any help/info.

 

[NascarFan96]

I know Kmart filed for bankruptcy in January of 02, but they were still on the 26/66 cars at Daytona and Rockingham because those races were already paid for. So I guess it just depends on if the races are paid for already or not.

 

[Majesticexpress]

Usually you have termination clauses in your sponsorship contracts to get you out of a situation like this. For the team I work for, all of my sponsorship contracts I write always have a clause to protect us from stuff like that. Now if they’ve paid in full, I’ll have to honor the marks and logos for the duration of the contract cycle