Alex Palou, previously embroiled in a federal lawsuit from Chip Ganassi Racing over his attempt to bolt for McLaren Racing as soon as 2023 and was presumed to be joining McLaren at the end of his likely 2023 IndyCar championship, has informed the team he "does not intend to honor his contractual obligations," according to a statement from McLaren Racing CEO Zak Brown given to IndyStar.

The news was first reported by the Associated Press, which Friday night published portions of a letter that was said to have been sent to McLaren employees after Friday's final IndyCar on-track session ahead of Saturday's Gallagher Grand Prix on the IMS road course.

"This is incredibly disappointing, considering the commitment (Alex) has made to us both directly and publicly and our significant investment in him based on that commitment," Brown wrote in the letter, according to the AP. "We dedicated a lot of time, money and resources preparing to welcome Alex into our team because we believed in him and were looking forward to IndyCar wins with him.

"Coming out of his team dispute last fall, we were assured by Alex of his commitment to Arrow McLaren reflected in the contract he entered into with us."

Chip Ganassi fires back on Saturday: McLaren 'playing the victim' on Alex Palou's contract status

Additionally, the team provided this statement to IndyStar on behalf of Brown: "I'm extremely disappointed that Alex Palou does not intend to honor his contractual obligations to race with us in IndyCar in 2024 and beyond. That is all I have to say on the topic for the time being."

The decision also came as a surprised to Palou's now-former management team, Monaco Increase Management. A company spokesperson told IndyStar MIM last spoke with Palou on Wednesday to, among other things, discuss his championship celebration in Monterey, and at no point in that conversation did Palou mention an intention to break ties with the McLaren deal that MIM helped land.

Over the next 48 hours, Palou ceased all communication channels with MIM and has since had Roger Yasukawa, his former manager who helped Palou navigate to IndyCar four years ago, take over his representation.

"Monaco Increase Management is bitterly disappointed to learn about Alex Palou's decision to break an existing agreement with McLaren for 2024 and beyond," MIM wrote in a statement posted to Twitter. "Together, we had built a relationship that we thought went beyond any contractual obligation and culminated in winning the 2021 IndyCar crown and tracing a path to F1 opportunities.

"Life goes on, and we wish Alex all the best for his future achievements."

Chip Ganassi released a statement Saturday saying: "I grew up respecting the McLaren Team and their success. The new management does not get my same respect. ... Simply stated, the position of McLaren IndyCar regarding our driver is inaccurate and wrong; he remains under contract with CGR."

Palou holds an 84-point lead over Josef Newgarden in the season-long IndyCar championship with four races to go, during a season in which he's also acted as the McLaren Formula 1 team's reserve driver. Notably, he was on-site representing the team for May's Miami Grand Prix and also tested with McLaren in Budapest in June and had said previously he would have a larger role with the team once his IndyCar season was complete. Additionally, Palou underwent several runs in McLaren's "Testing of a Previous Car" program last fall and ran Free Practice 1 in McLaren's (then current) 2022 F1 car during the U.S. Grand Prix in October at Circuit of the Americas, where he ran within three tenths-of-a-second of fifth-year F1 driver Lando Norris.

Palou briefly stepped onto that international platform months after a chaotic summer that kicked of mid-July with a stretch of a few hours that saw CGR announce it had picked up an option on Palou's contract for 2023, only for the driver to tweet that the statement -- which included a quote attributed to him -- had not been approved by him and that he did not intend to race for Ganassi in 2023.

Moments later, McLaren Racing tweeted that it had signed Palou to a deal -- kicking off a saga that would include CGR filing a lawsuit in federal court accusing Palou of, among other things, breach of contract. The driver maintained his calm, collected demeanor publicly while first telling reporters he was certain he'd be driving for McLaren the next year, before taking a step back and often declining comment while the legal proceedings took their course. On-track, the defending champion's performance dipped a bit, as he fell out of championship contention and only logged one top-5 finish in a seven-race stretch.

Then came the season-finale weekend at Laguna Seca, where Palou throttled the field by more than 30 seconds during a weekend the public later learned he and CGR's lawyers had closed in on an agreement to end the mediation sessions that had dragged on for weeks.

That agreement would see the Spaniard return to his No. 10 Honda ride for the 2023 IndyCar campaign while taking on a McLaren F1 test and reserve duties during the back-half of 2022 and during portions of the 2023 IndyCar season when it would not interfere with his CGR responsibilities.

Since that agreement was forged, Palou has not shied away from the media, nor has he run from questions about his future. But the young IndyCar talent has also repeatedly told reporters that he would not comment on what he would be doing in 2024 until around or after the Sept. 10 season-finale at Laguna Seca -- beyond noting during scrum session with assembled media ahead of each race weekend this summer that he did not yet have an offer to race in F1 in 2024 -- as recently as Thursday.

Amidst the speculation, there remained a handful of members in the paddock who have claimed to have seen Palou's signature on documents tying him to McLaren (or Arrow McLaren) for 2024 and beyond, calling into question a clause IndyStar noted in Palou's current contract with CGR obtained via public records last fall. That clause plainly stated that the driver would not be permitted to begin negotiations outside Ganassi regarding his future beyond the 2023 IndyCar season until Sept. 1 of this year.

And yet, Brown's reference on Friday to Palou's "contractual obligations" the driver is choosing not to honor would suggest that the two sides had a legally-binding agreement. It can then only be assumed CGR waived its rights to Palou's exclusive negotiation window last September as part of the undisclosed settlement, making way for the points leader to have entered into an agreement with McLaren Racing that Palou now seems to be attempting to skirt.

Palou did not respond to multiple attempts to contact him by IndyStar on Friday. Yasukawa, Palou's former manager who spearheaded the future champion's introduction to IndyCar with Dale Coyne Racing, as well as Palou's initial deal with Chip Ganassi Racing, confirmed to IndyStar on Friday night that the ex-IndyCar driver-turned-driver-manager was back in-charge of Palou's contractual affairs "in full capacity," noting that the driver had parted ways with MIM. Yasukawa, though, declined further comment.

Earlier this summer, IndyStar was told by a source close to the parties' negotiations that in McLaren's signed contract with Palou existed a clause listing a date (believed to be July 31) before which the driver could have released himself from his future deal with McLaren if he had landed an offer for a 2024 F1 ride. Should an F1 offer have come in after that date, Palou would've been required to have McLaren loan him out (or arrange for McLaren to be paid some level of a buyout) in order for Palou to be driving anywhere other than Arrow McLaren during the 2024 racing season.

As Palou told reporters Thursday, no offer for a 2024 F1 ride had been made to Palou before he informed McLaren of his decision to back out of his multi-year deal. Pertinent to Friday's news, IndyStar also reported earlier this summer that CGR had extended Palou a new, sizable seven-figure contract offer in the midst of the runaway championship leader's run of three consecutive wins and four in a five-race span.

Without a clear landing spot for next year in F1 -- the series Palou has long set as his preferred ultimate destination -- all signs point to a reconciliation with CGR, beyond the already mended feelings both sides came to following their summer dispute. Since, Palou has registered 14 consecutive top-8 finishes with five wins, all while those outside their inner circles were under the impression they were headed for a divorce in a month.

With McLaren clearly of the mind the global racing organization is under the possession of a now violated contract, Palou's impending, sizable payday from CGR could come to good use, with the possibility McLaren could choose to file a new lawsuit in attempt to recoup funds the team had invested in Palou's F1 testing program, along with any advances on his contract McLaren may have already paid the title-winning driver.

This article originally appeared on Indianapolis Star: McLaren: Alex Palou 'does not intend to honor' contractual obligations