Another Texas TracGroup article

[NickHolt]

Here is an article by Emily Taravella in the Nacogdoches Daily Sentinal that I missed when I was searching for information about the Texas TracGroup situation. It paints a negative picture of past business ventures by Donaly Teague, one of the key players in the Texas TracGroup organization.

 

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Teague’s Farming Venture Turns Sour for Investors

By EMILY TARAVELLA, Sentinel Staff

 

Residents of Healdton, Okla., are still smarting from a failed business venture Donald Teague brought to their community in 2001.

 

An article published in The Ardmoreite , Ardmore Okla., on Oct. 11, 2001, spelled out some of the problems that arose after individuals paid between $2,500 and $3,500 to be part of a farming venture that promised a high-yield return.

 

The participants paid the money to Integrated Production Systems, according to the article. The city of Healdton was first approached in March 2001 by Teague, who dubbed himself a Strategic Business Engineer.

 

"The plan included using local farmers and ranchers as contractors to raise ostriches and goats to sell to niche markets that Teague said were swelling across the United States," the article said. "For a franchise fee of $2,500 and 10 acres of land, farmers would be allowed in at the ground floor of the operation."

 

Residents of Healdton who were interviewed in the article said that Teague told them the business had the potential of netting a profit of $400,000 dollars over the first five years.

 

"City officials also believed the operation held strong potential," the article said. "The city council went so far as to approve the sale of 10 acres of land to IPS for a hatchery and brooder facility."

 

City Manager John King was quoted as saying that "enthusiasm got the best of them."

 

In an interview Friday with The Daily Sentinel , King said the project was going south when the Ardmore newspaper published the story, "and it kept going further south."

 

"It was an extremely convoluted deal," he said. "Local investors lost money — all of it. It didn't go well at all, and nothing that was promised or advocated ever came to fruition."

 

Mike Skinner, Healdton fire chief, said he invested $2,500 of his own money into the venture.

 

"We were told that they needed 20 acres of farm land and $2,500 from each participant, to start," he said. "I thought it sounded OK, and I was the first one to sign up."

 

Skinner said the first farm was supposed to be built on his property. But when he saw the plans, he became skeptical.

 

"I told them to build on (another investor's) place first," he said. "I told them I would look at it when they were finished, and then we might make some changes."

 

The first farm was supposed to be built on investor Joe Roberts' property. Roberts said he and others did everything Integrated Production Systems told them to do.

 

But Roberts said he "knew there was trouble the first time they came on his land."

 

Roberts eventually received a $1,880 invoice from a fencing company, according to the story inThe Ardmoreite, and a cement company placed a lien on his property for work they did that was never paid.

 

Roberts told The Ardmoreite that IPS had agreed to pay for all the work that was to be done on the farms.

 

Roberts was quoted, at the time, as saying that IPS wanted to redo the contracts and have the farmers pay for everything.

 

"My contract said that I can get reimbursed for my franchise fee at any time I am not pleased with the operation," he said, at the time.

 

Roberts said that Teague told Healdton investors that their operation was the first and only of its kind.

 

"But they soon found out that Teague had been simultaneously starting a similar operation in Russellville, Ark.," the article stated.

 

Gayle Snow, a representative of IPS, was interviewed by The Admoreite, and she said that a total of 10 farms in Arkansas and numerous growers in North Carolina and Texas had lodged similar complaints.

 

Five years earlier, some North Carolina farmers voiced similar complaints.

 

According to an article published in The Charlotte Observer on Oct. 12, 1996, some North Carolina residents paid up to $10,000 to get into Teague's ostrich business. At that time, Teague was president of the Venture Management Group, an Austin-based company which had begun signing up prospective farmers, two years earlier in North Carolina.

 

The Venture Management Group filed for Chapter 11 bankruptcy protection in 1996. "But Teague told farmers to keep faith in his vision of creating an ostrich industry with a complete farm-to-market system much like the cattle and poultry industries," the story said.

 

"Teague dismissed the Chapter 11 filing as a move the company took as part of a tax dispute with the Internal Revenue Service and said it would not affect Venture Management's plans," the article said.

 

Venture Management had agreements with farmers in North Carolina to set up about 150 farms there, but none of the farms ever became operational.

 

Shortly after he declared bankruptcy for the Venture Management Group, Teague announced a spin-off corporation known as VMG-Ratite System Inc, according to The Charlotte Observer. (Ratite is the scientific term for birds such as ostriches and emus.) VMG is now defunct, according to the Texas secretary of state's office.

 

He said the board of directors for VMG-Ratite had approved a $3.9 million budget for his project, but by that time most of the investors had become disenchanted with the project. Most of the individuals interviewed by The Charlotte Observer indicated that they felt betrayed.

 

After complaints against Teague began to mount in both Oklahoma and Arkansas, the IPS board of directors in Oklahoma met and relieved Teague from his position with the company.

 

IPS has apparently dissolved since that time. The company's telephone number is no longer a working number, and Skinner said no one knows what happened to the company.

 

Skinner said all the Oklahoma investors lost their money, and at this point they have given up hope of every recouping it.

 

"We worked really hard to get information on all of this to the FBI," Skinner said. "We wanted to have something done about it. When Sept. 11 happened, all of this just sort of went to the back burner."

 

Skinner said people in Healdton still have hard feelings toward Teague and the business venture.

 

"He just keeps on rocking," he said, upon hearing of the motor speedway venture. "But people need to know who he is, and what he's all about."

[ChuckLicata]

Here we go again...

First and foremost, this article came out on March 1st, when all those other articles were coming out..this is NOT a new article on the situation..

And, may I say, there is a LOT of false accusations against Donald Teague in these..

To put it bluntly: Donald was to IPS what he is to the Texas TracGroup...ONLY a business engineer..he had NO ties to IPS (or Texas TracGroup) management, he makes NO management decisions..he doesn't take ANY money from ANYONE...

Again, there's nothing HERE that's new from what's been printed BEFORE..If the newspapers/media want to keep living in the past,then LET THEM...Plus, what's printed here (and what was printed back in 96) is WAY OFF from the facts..

This is here-and-now...Teague is a strategic business engineer with Texas TracGroup only, he's not part of their management, nor does he make any decisions for Texas TracGroup..

There have been several press releases from Texas TracGroup saying they're okay with Teague, who told them (in detail) about his past before Texas TracGroup hired him..

Now, I suppose there's something in everyone's "closet" that they'd rather not have released?

Bury it, gang..Texas TracGroup will move forward and there WILL be racing in 2005..Any questions?

[NickHolt]

Chuck,

 

I appreciate that you are a contractor to the Texas TracGroup and it is your job to accent the positive and downplay the negative. You do a good job, too!

 

Actually, I think all of us connected with stock car racing here in Texas wish there were no negative aspects whatsoever to the Texas TracGroup proposal. The idea of big league racing coming to our backyard was met with enthusiasm and hope by all of us.

 

Of course you understand that what we are doing here at Texas Speed Zone is reporting news and information and promoting discussion about stuff that is relevant to racers in Texas. And if this story is not relevant to racers in Texas then I don't know what is. Despite your wishes that this story would just go away, it's not going to, and as news and information becomes available about the project, we will be sharing it - be it positive or negative - with our members.

 

Your argument that what's in the past is past and not relevant to the current situation doesn't hold water. It's an a fact that in the business world, the best predictor of future performance is past performance. If there is a string of failed businesses connected with Mr. Teague, it only makes sense that this information is very relevant to potential investors, communities being considered and to all of us racers. Pretending that problems don't exist is not the way to go.

 

Nick Holt

[ChuckLicata]

Nick,

I understand what you're saying, and you're absolutely correct--this forum is open to ALL VIEWS, be it positive or negative...and, I'll be happy to alert everyone of ANY breaking news because that's what The Motorsports Zone is all about!

My only thing is that I hope we can post any articles about this (and any) subject in the future in a timely manner..Taking an article that ran on March 1st and posting it on March 10th, in this case, is a little late, only because the whole "Donald Teague" scandal was back at the beginning of March...when the article gets posted 9 days later, some may get the impression that it's a "newly released" article when, in fact, it came out at the same time all the other ones did...

On a much lighter (and on a private-joke) note... So, doeswhat you're saying mean that a certain former track owner (hypothetically, say, someone who used to run San Antonio Speedway back in the 90's) would face potential future problems in business because, say, he spent his money at--oh, I don't know---less-than-desirable establishments?

Give me your thoughts in $1 bill increments..LOL

Chuck

[NickHolt]

Chuck,

 

I'll answer your hypothetical question this way. If the hypothetical 1990's-era track owner owed his hypothetical competition director a few thousand dollars, that hypothetical competition director would be just plain stupid to enter into another business relationship with the same hypothetical track owner -- no matter where the hypothetical former track owner spent the money he owed the hypothetical competition director. History teaches painful lesssons and I'm fairly certain that the hypothetical competition director will not be entering into future business arrangements with our hypothetical track owner.

 

That being said, none of us are perfect (and anyone who knows me at all well knows I have more than my share of shortcomings) and most of us are perfectly willing to let bygones be bygones. But when people have shown a past pattern of behavior, most of us just naturally assume that that behavior will continue in the future. This is especailly true in the business world. Otherwise, references would not be eagerly sought by employers and auto insurance companies would not raise the premiums of someone with a record of moving violations and car wrecks.

 

Again, I am among those who were very pleased by the prospect that big-time stock car racing was coming to Texas. And I continue to be hopeful that Texas TracGroup can overcome this rocky start and pull this thing off. But, to bury our heads in the sand and pretend that everything is just fine is not the way to go.

 

You have shared with us that you are working closely with the Texas TracGroup as a contrator. This is good. As I have stated before, one of the primary reasons I continue to believe that the Texas TracGroup is legitimate is that people with good reputations, such as yourself and Wally Dallenbach, Jr., are associated with this group.

 

In the meantime, Texas Speed Zone will continue to post information (both positive and negative) regarding the Texas TracGroup and its plans to bring high-dollar racing to Texas. The Texas racing community deserves nothing less.

 

Nick Holt

[WartHawg]

Goodness, gracious, this thread has my journalist's nose quivering faster than my old hound Daisy's when she heard granddad talking about going coon hunting.