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Promoter of Maxim Indy 500 party sues IMS claiming event was a bust

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INDIANAPOLIS, Ind. – The promoter of the Maxim Indy 500 party is suing the Indianapolis Motor Speedway.

California-based Karma International claims the Indianapolis Motor Speedway breached their contract because they failed to properly promote the party on social media. The lawsuit also alleges that the IMS breached their contract by not sending an email to all past and current ticket buyers about the event.

Tickets for the party sold for $500 a piece.

"We're not rich people. We're normal people here. This is too much money," said Betty Schutters, in Speedway Tuesday night.

Schutters can't believe the claims made against IMS.

For the 100th Running, Schutters said the track lived up to her expectations and some.

"I think they did a super job at everything they had done and promoting everything they did for the Indianapolis 500," she said.

But Karma International disagrees.

Karma International expected to sell 1,500 tickets for the event held on Friday, May 27th, and they anticipated they would make $1,000,000 in revenue. Instead, they sold 418 tickets, and many were sold at a discount. And the company made only $182,500.

Karma International is seeking $817,500 in damages.

The company alleges IMS didn't send a dedicated promotional email to the large track database, "collectively greater than the 425,000 people that bought tickets for the 100th Running of the Indy 500."

The company also said this year's ticket holders didn't get a dedicated email, and the email that was sent by IMS was sent to a database of concert buying ticket holders of 15,000 people, which included a list of other events in addition to the Maxim party.

A copy of a trade agreement included with the lawsuit stipulates that Maxim would receive from IMS "one dedicated e-mail to IMS database."

According to court documents, the organizers hosted a similar Maxim branded party at the Super Bowl in Indianapolis in 2012 and it generated $1,056,850 in revenue. They hoped to earn similar profit at this year's event.

"I've never seen anything quite like this. Events succeed and fail all the time for a lot of reasons," said James Nehf, professor at IU's McKinney School of Law.

Nehf teaches a course on contracts. He said the company must prove exactly what IMS obligated themselves to do, and in his opinion, the agreement attached to the lawsuit could be seen as vague.

"It would be up to the plaintiffs to carry the burden of proof that indeed what the IMS did was the cause of all their damages," he said.

Alex Damron from IMS released the following statement on Wednesday afternoon:

“The claims made by Karma International in this complaint are false and IMS will vigorously defend against them. As this is pending litigation, we will have no further comment on the matter at this time.”

The lead attorney for Karma International, Brett Datto, of a Philadelphia-based law firm, said lawsuits are "uncommon" for Karma International and maintained that the group felt "as though they've been wronged." He released this statement in response to IMS.

"We stand firmly by the allegations made in the complaint, and we're ready to vigorously prosecute the case."