USA Pro Cycling Challenge race promoters Medalist Sports are still awaiting payment on invoices from major sponsor Exergy Development Group, but a lawsuit against the company announced today could be a setback for a settlement which was promised by Exergy CEO James Carkulis.
The Associated Press today reported that Exergy is being sued for $37.9 million by AES Corp. for failing to fulfil its contract obligations to purchase 32 wind turbines.
Cyclingnews broke the story earlier this month of Exergy's missed payments to the cycling events it promised to support, the list of races includes the the eponymous Idaho Exergy Women's Tour and Medalist Sports events such as the USA Pro Cycling Challenge in Colorado.
The company's problems meeting its financial obligations extends well beyond the cycling world, the AP report states the company was forced to renegotiate its contract with AES for the turbine purchases after missing payments, but failed to follow through on the terms of that agreement as well.
Carkulis still maintains that the company will go through with the purchase of the wind turbines, just as he promised to pay the cycling invoices by mid-September.
Medalist managing partner Chris Aronhalt met with Carkulis at the USA Pro Challenge, and stated that he was "optimistic and encouraged by the update we received from Exergy", he told AP.
Carkulis said the company had already paid out $1 million to the Exergy Tour, but according to AP it still owes $26,000 to Boise for the police support that was provided, and the city is intending to take the unpaid invoices to a collections agency if it is not paid.
Last week, Carkulis opined in the Idaho Statesman on the topic, stating, "We had already paid over $1 million toward Exergy Tour expenses and still have some bills yet to pay. It is also safe to say we shall pay the remaining balance and we are disappointed our commitments temporarily outran our ability to pay them."
Exergy currently supports two professional teams - the UCI continental men's Team Exergy and the women's Exergy-Twenty12 squad. It also is listed as title sponsor of the upcoming US Gran Prix of Cyclo-cross.