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Caterham F1 Team handed over to administrators
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Posted By: Declan Quigley  |  24 Oct 2014   |  12:53 pm GMT  |  74 comments

In a shock development, the Caterham F1 team has announced that the consortium behind the takeover of the Leafield squad has handed back control of the F1 team to the administrator of Caterham Sports Limited to allow it to prepare and continue operating at the “next events.”

The announcement comes less than 24 hours before the Caterham cars and equipment are due to be shipped to Austin Texas ahead of next week’s US Grand Prix.

The Caterham statement read: “Following a request of yesterday evening at 21.55hrs CET from Caterham Sports Limited’s administrators and the legal advisors of Mr Tony Fernandes’ related EXIM Bank, representatives of 1MRT/Caterham F1 Team have agreed, with all rights reserved, to hand-over management of the Caterham F1 Team to the adminatrator Mr Finbarr O’Connell in the higher interest of allowing the team to continue operating and preparing for the next events.”

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The news is a surprise because the consortium’s adviser Colin Kolles has consistently claimed that he and his backers have no connection with Caterham Sports Limited and have legally acquired the right to run Caterham cars in the world championship.

However, Finbarr O’Connell of administrators Smith & Williamson seized control of the Leafield factory last week and refused to allow the cars to be released to the team.

It’s not clear how the administrator could run the team in Austin even if the cars and equipment were at the track.

We’ll have more on the story as it unfolds.

 

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74 Comments
  1. Jock Ulah says:

    Bernie oils the machinery . . .?

  2. oddball says:

    Why is this dentist allowed into F1?..every time a team has dealings with him then its a black day for the staff. Just ask Toto how this works out (i wont go into details James and Mods,i know the court order :), but really..first he does not know whats happening, then a cleaner is a sole shareholder and now its handed back….
    I just hope Tony F can keep his promise and look after his staff

  3. Phil says:

    Holy moly, it’s well and truly hit the fan. I can’t see how the hell they’re going to be running in Austin now.

    Want to run your own F1 team; consider a career as an Administrator. This gets murkier by the minute.

  4. Brett says:

    Get rid of all these backmarker teams and let all the big teams run three cars. Get rid of pay drivers and let real talent shine through.

    1. Voodoopunk says:

      No.

    2. DC Corey says:

      Yes.

    3. KGBVD says:

      Healthy debate here, clearly.

    4. Denis68 says:

      No

      It will destroy F1 very quickly. Real talent will shine through anyway, always has and always will.

      Alonso started at Minardi, Schumi at Jordan, Vettel at Torro Rosso, Hakkinen at Lotus etc etc. Hamilton and Hill are the odd one’s out that walked straight into a top team.

    5. Pkara says:

      Did somebody leave the light on ? :-D

  5. franedrpaco says:

    This is beginning to look like a Whitehall Theatre production, with the stage being set as the CSL factory and four stage entrances for the protagonists.
    (For youngsters under the age of fifty The Whitehall Theatre was renown for its farces)

  6. Adam says:

    Bizarre in the Extreme!

  7. Laurence H says:

    This is why I’m not a businessman. I haven’t got a clue who owns what, or what all.the different companies do or are! Been trying to follow this story, but I’m giving up now.

    1. Random 79 says:

      Don’t worry – No-one else has a clue either, especially the people involved :)

      Stick with it, there’s still a week to Austin and some interesting developments to come:

      The now unemployed Ghurka soldiers will form a dance company and go on tour, delighting people all around the world.

      Britney Spears will announce that she’s buying Caterham.

      Random 79 will announce his true identity.

      Penny will discover that she’s actually a cyborg sent from the future to kill Leonard.

      Mercedes will withdraw from the championship on the grounds that it was just too easy.

      Bernie’s exo-suit will break revealing the fact that we was really an alien badger from Proxima Centauri sent to replace the original Bernie in order to destroy F1 once and for all.

      So, good times ahead…unless you work for Caterham :(

      1. Jock Ulah says:

        We all know that you’re Joe Saward . . .
        Taking a light-hearted break from the burdens of journalism . . .

        So you can cross that off your list.

    2. krakinho says:

      If you don’t understand who’s running Caterham, try to understand who is running F1 as a whole. There’s gazilion of companies being mentioned especially in last decade or so. God knows how many of them are Bernie’s (FOM, SLEC, Bambino etc…) how are they interpolated, who owns who and what…let alone all the other companies, investment funds, banks etc. we read from time to time in association with F1.

      Maybe, this is good topic for James to shed some light during off season.
      James?

  8. Drgraham lewis says:

    A certain administrator would appear determined to make a name for himself here. It looks like that may have backfired.

    His actions so far appear quite unlike the required duties of an Administrator (the maximisation of return and trying to retain the entity earning potential if possible) in the locking up of the money earning ‘vehicle’ etc.

    I would guess this latest move is quite possibly as a result of a couple of late nights looking at the rules under which F1 teams continue to retain the right to race ie actually be there, the realisation that those padlocks and soldiers remaining in place will make the whole operation worthless if they lose those rights and his position and tenure will mostly likely last even less than the team if he actively reduces the worth of the entity simply because he is very impressed with himself!

    1. Kimberley says:

      They are not the required duties of an administrator. The administrators role is to run, if able, the company as a going concern under strict solvency rules, but for an F1 team where is the money coming from? I’m pretty sure they get very little from F1 itself unless they are one of the top constructors or liable to increased payments through some kind of deal with BE, but from racing at a given event? As far as I can work out, nothing or very little.

      The only good news for Caterham is at least now the whole team appears to be together. The situation previously did no one any favours. Maybe a white knight group to buy now it’s all in a single package?

    2. Drgraham lewis says:

      Kimberley – that is what I said?

      Trying to retain the entity earning potential is running the company?

      Further if that is not possible then it is to take actions to extend that running period while returning the creditors the maximum value.

      The administrator is not a friend here of anyone other than the people owed money.

      I think you completely miss the point that the entire value of that team entity is that it owns two grid slots. That is the net worth right there given the rest is clearly either furniture, owned by someone else or mortgaged.

      If they miss this race (something the administrator clearly had no idea about) then they put those grid slots at risk unless Bernie does a backtrack. That is in the rules.

      That is the entire value and future income jeopardised right there because the administrator feeling full of himself did not really understand what he was doing. Hence my comment in that his actions were reducing any potential equity by the minute given today’s cars can hardly be thrown on a truck and be expected to run without factory support and backup.

      1. kenneth chapman says:

        @drgrahamlewis…you seem to be forgetting that the team is ‘insolvent’ so who is going to put up the finance to keep the team operative? there is no chapter 11 operating in the UK to the best of my knowledge.

        where i come from if an entity’s liabilities exceed their assets they are technically insolvent and to continue to trade is illegal and a criminal offence. the administrators obligations are to protect the assets for the shareholders, not incur further debt.

  9. Richard Piers says:

    What a mess ! What a pack of liars ! What a nest of vipers !
    F1 really does attract some appalling people, surely there can be better policing than currently or is money the only god.

  10. Rupert Suren says:

    Maybe Finbarr O’Connell could give Eddie Jordan a call for a bit of advice.

    1. Andrew M says:

      I don’t think the situation’s that desperate yet is it?

  11. Andrew M says:

    “The news is a surprise because the consortium’s adviser Colin Kolles has consistently claimed that he and his backers have no connection with Caterham Sports Limited and have legally acquired the right to run Caterham cars in the world championship.”

    It’s certainly a massive backtrack, but I wouldn’t say it’s necessarily a massive surprise…

  12. Jodum5 says:

    How’s this a “shock” development?

    1. Declan Quigley says:

      As Andrew M says above it’s a massive backtrack and I don’t think it was expected though it’s hard to see how this unfortunate saga will play out. For the sake of the hardworking staff and fans of the team we can only hope that a buyer is found very quickly…

    2. Peter Scandlyn says:

      It’s a shock to the two sides who’ve finally stopped and read the fine print to discover the administrator is correct in what he is saying…Simples.

  13. Sebee says:

    Let’s band together and at least buy a team shirt to wear around the house.

    Plenty on ebay for 10GBP or less. Those that know F1 will understand why you bought it. Those that don’t know F1 will think you work at a catering firm specializing in pork dishes. Delish!

  14. vvipkho says:

    A big confusing this few days :
    Now who is the real owner of Caterham F1?

    1. Drgraham lewis says:

      The administrator…

      Unless a deal is done with BE because not letting those cars race is putting all at risk as per my comment above.

      I guess Finbar just figured out the rules…

  15. Robert Lujan says:

    Are you serious….An Administrator on the pitwall… I want to see the first pitlane interview with Finbarr O’Connell and Eddie Jordan!

  16. Random 79 says:

    So Fernandes and the other lot have gone from arguing over who owns the team to arguing over doesn’t own the team to agreeing to hand ownership of the team they don’t own over to the administrator? Wasn’t the administrator already in control of the team? How are they going to get to Austin? And who’s who’s going to supply all the duct-tape to hold the cars together?

    “It’s not clear how the administrator could run the team in Austin even if the cars and equipment were at the track.”

    Fortunately that’s one question I can answer: The Ghurka soldiers that were guarding the factory will now be in charge of race strategy and performing pit-stops with the administrator as team principle.

    Love the photo of Kolles by the way – At this point he’s even more confused than we are :)

    1. Gaz Boy says:

      It’s a great big bloody mess if you ask me.
      With the benefit of hindsight should the Caterham/Lotus project be shot at birth? That is very harsh on the good folks who work there, but you can’t just go motor racing on a whim and idealism.

      1. Random 79 says:

        I reckon Fernandes started with the best of intentions but yeah, it went downhill fast.

        Let’s hope Haas can do better.

  17. Sebee says:

    My goodness, did Eddie Jordan really say this?

    “Sebastian Vettel has got to look over his shoulder and take a look at himself in the mirror, because today he’s been blown off by a younger guy.”

    What has he seen as he walks into the RBR garage? Really, this should be kept private. :-)

    1. oddball says:

      Funny

    2. Random 79 says:

      And I thought I was bad Sebee…well done! :)

    3. Rich C says:

      He’s channeling Murray!

  18. Howard P says:

    I’ve worked as an Administrator in the past, if I had known there was a chance of owning an F1 team I wouldn’t have studied engineering!

  19. Pen says:

    Nice idea to have Fnarr Fnarr interviewed by EJ! But he and the S&W team won’t actually be managing operations, the role of an Administrator is more akin to a replacement financial controller. I don’t know Fnarr bur I was 16 years at Smith & Williamson and they are a pretty competent bunch.

  20. Daniel M says:

    Wow, becoming an administrator sounds like a good job. Might get to play real life scalextric for a few weekends before packing up the whole thing and mothballing it in the loft.

  21. Jonathan C says:

    What I don’t understand is, considering how parts have already been seized from the factory, why did they return the cars there in the first place? Surely there was always a risk this could happen and they should have parked them somewhere not owned by whichever company is under the Administrators.

    1. Random 79 says:

      Like at McDonald’s?

    2. Andrew M says:

      It was mentioned by Ted Kravitz that without access to the servers and other equipment at Leafield the cars were useless, so not a lot of point doing that.

    3. Drgraham lewis says:

      One they need the factory based support and two BE and the freight people deal with all transport to the door. You sort of have to have a door…

  22. Robert says:

    OK, for those of you not in business, this is NOT a surprise. The only value in Caterham to extract is if the team finishes the season, otherwise if forfeits 50 million. That is in NO ONE’S best interest, either the past or future, or past/future/present owners.

    What has happened is that an administrator is following the USUAL “Administrator’s Playbook 101″, which first calls for rounding up all the assets and taking control of them, for summary disposal at auction or sale. That would be Mr Finbarr. Of course the “Administrator’s Playbook 101″ doesn’t have a chapter for “team must finish season or forfeits 50 million smackeroos”. It DOES have a chapter for deploying guards and another on sounding tough.

    So what has happened is that people that understand the missing “50 million smackeroos” chapter, including Fernandes and the new owners, and probably Bernie, have had a coming together and said enough is enough. Let’s do the adult thing and salvage some races for all of our sake’s.

    The administrator will probably hold _title_ to the cars, or at least some form of control of them even if they race. But he has been told that he has to let them race to close out the season.

    As for who will actually run the race, I expect to see none other than Tony F and his boys sitting on the pit wall in a week’s time, as he is the only one that has a chance at running the race safely and with the fewest screw-ups. And Bernie would probably insist upon that – the show must go on, and it must be safe. Especially these days…

    1. Andrew M says:

      “The only value in Caterham to extract is if the team finishes the season, otherwise if forfeits 50 million.”

      How does it forfeit 50 million (pounds?)? I didn’t think teams outside the top 10 got any money, and Caterham don’t look like getting there.

      1. Robert says:

        No, I think it is their deposit with Bernie and F1, which they would forfeit if they do not complete the season. Basically it is a performance bond, to ensure that F1 has enough teams completing the season to fill the races.

    2. Drgraham lewis says:

      Thank – apparently few understand these rules.

      Including Finbar… At a guess :)

    3. Drgraham lewis says:

      And don’t forget the value of those two grid slots which by my calculation is all that’s left.

      Don’t turn up at a race… BE decides from there…

      And the rest is furniture and some really unlucky skilled and competent people far better at their jobs than the 101 administrator…

    4. kenneth chapman says:

      @ robert….’and for all of you not in the business……..” infers that you ‘are in the business’ and we are all simply uneducated [ F1 ] prats. obviously your expectations/predictions have vanished into thin air re fernandes et al perched on the prat rail in texas and interlagos.!!!! so what’s next from your crystal ball………

  23. Johnny Canuck says:

    I understand that the bottom line is that Caterham has to finsih the season to retain its F1 license and have something of value to sell at the end of the campaign. My question is, what exactly constitutes finishing the season? Does the team actually have to have one car on the track at the start of the race? If so, can they immediateky retire without running a lap (which would be rather easy if they do a pit lane start)? Would appearing during a qualifying session be enough to claim they “took part” in the race weekend? Or do they only need to have the cars at the track even if they never leave the garage? What exactly do they need to do in the coming weeks to retain the Caterham F1 franchise?

  24. Ed Valentine says:

    Why is it that F1 teams have to fold while football clubs can rack up debt and in some cases continue to spend big? Looking at the Premier League mid table teams like Stoke can compete in relative safety while in debt why can’t the same mechanism be in place in F1?

    1. Andrew M says:

      Because football clubs have the ability to earn money to pay those debts back over time; Caterham doesn’t. Also if they’re in financial difficulties football clubs can massively downscale in a way that an F1 team can’t.

      1. Ed Valentine says:

        I agree about the propensity for football teams to earn more and downscale but their debts are generally growing and it becomes a race to the bottom as they spend more though that bottom is never reached. The book Soccernonics tells us that football clubs just don’t go bust that often despite increasing losses year on year. Leeds United were recently losing £1million every month and getting deeper into debt for nearly 2 years. Proportionally if a F1 team was in the same position it would be closed down rapidly.

  25. goggomobil says:

    Who cares whether Caterham F1,Marussia and to some extend Sauber fells of the bed, there were there believing in song and dance of Frankie going to Hollywood,we are living in mordern times , to be successful in anything it takes a money, real money and that includes your wife,that ‘s right your wife,girlfriend,mistress,those who believe otherwise are blowing to the wind!
    Money makes money a fact of life,don’t be envious of Bernie Elcconstone he may be a 5 ft + but he deserve 7 footer all day long, just look the woman past and present around him.
    I say let the introduction of the third car begin like they used to have in real motor racing days,lift this crappy restrictions and reguations of and let the briliant minds of engineering show their ware!

    1. Robert says:

      So I take it you would be happy with four teams running 5 cars each? Because that has been tried before, in the States, and it was so dull for fans that they are trying like hell in NASCAR to undo it.

      Racing is only fun if there is some element of chance and some drama. And some likeable losers to root for too. Otherwise F1 will just be a few manufacturers running nearly identically speced cars – kind of like DTM is today. And how many DTM races do you watch?

      You sound like someone who hasn’t watched too many other forms of racing to see what the alternatives really look like. I have, and they are boring as hell to watch.

      WRT money, there is PLENTY of money – it’s just not being distributed fairly. How can Caterham compete with Ferrari,when Ferrari get $100MM upfront before anyone else gets a dime? How can the bottom teams ever be successful when the top 4 teams take home the huge bulk of the money?

      You talk about money as if these teams are inherently poor relations. They are not – some bright businessmen own them. But the issue is the division of the TV rights and gate fees, which is no where NEAR equal. All this talk of three car teams is to keep your eyes away from the fact that Bernie starves the bottom teams so that he and CVC can take huge amounts of money out of the sport and pocket it. The problem is that he is starving the product of re-investment, and the sport is poorer for it.

      1. oddball says:

        +1 for the little guys

      2. Pkara says:

        I agree with your fact that the way F1 is orchestrated by Bernie & CVC is a way both filter huge sums into their own pockets while very little goes toward the litfle teams.
        Ferrari receive a huge lump at start of each year because of their status & that should not happen…as Ferrari always threaten to leave constantly when things are not going their way. But each year they are there….due to the huge lump of cash. Greed follows greed.
        CVC & Bernie have too much power. But you have to ask… Why on earth did the teams hand him so much power?
        Bernie has the knack of ‘guilding the lily’ while you are blind sided & before you know it
        you’ve signed your soul away for a 100years. He is The Darkside…a Sith Lord perhaps !

      3. goggomobil says:

        @Robert,Robert you are lovely man,but you have’t answered my point.
        Fact, money talks ,Don’t be grumpy about Ferrari,over the years Ferrari had earnt it,a brand name that every hot blooded man/woman want to be part of, in US is the symbol of self made man / woman,F1 without Ferrari would be like a world without woman boring, boring period!
        The other day Ron Dennis said,and in time a classic quote,Costumers cars can’t win a WDC or the WCC,one tend to believe what he said.
        Robert, I quote the very popular US presendent Roosenvelt who said if you can’t heat in the kitchen get out!
        My argument applys to F1 grid .

    2. Pkara says:

      Well said goggomobil :-)
      Your post had abit of Spirit behind it :-)

      Unhilt the sharp Sabres & Charge the hill for a last Hurrah .
      Screaming “God SaveThe Queen & last man to get to the top
      is a big girls blouse!!”, Hahh there’s nothing like abit of
      Lord Flash Heart (Rik Mayal R.I.P.)

      Yes its a tedious affair regarding the small teams but I’m afraid this will be a slow & stretched cull
      as they try & survive (or they think they can survive. But deep down its just fantasy).
      They will still fail just as Bernie has planned for their demise.
      F1 will be a closed shop affair with only the big boys competing such as giant car manufacturers & billionaires who have money to burn.
      I know Fernández is rich but not on the same level as the elite rich like The Russian Oligarchs or the new oil rich countries.

  26. Rupert Suren says:

    When you combine ignorance and leverage, you get some pretty interesting results

  27. vvipkho says:

    Bernie Ecclestone has given Caterham special dispensation to miss the U.S. and Brazilian GPs while they find a new buyer

  28. Pkara says:

    Has anyone brought the flag down & blown a rendition of Ths Last Post” at Caterham HQ?
    & set alight the two cars for posterity :-)
    About time this was brought to a swift close.
    Time to move onto Marussia & then Sauber…
    I can hear the sharpening stone grinding & see the sparking as the hatchets are being sharpened.
    Slowly but surely a new age of 3 car teams is drawing closer.
    Bernie is playing the long game & watching from his high tower…grinning like a Sith Lord as the lower teams fail.

  29. Rich C says:

    I’m going to need a flow chart for this…

  30. John in SD says:

    F1 needs the ‘small teams’. They provide seats for the hopefuls – Fernando Alonso in Minardi, Danny Ric in HRT, etc. Realizing that there is a lot of greed, why can’t someone in F1, who has the sport’s interest above their own be statesmanlike enough to design an equitable revenue source for all teams?

    1. goggomobil says:

      Its yesterdays bread.

  31. Anonym says:

    It would be really hilarious to now see Finbarr O’Connell dressed in Caterham’s uniform and talking about car developments and scoring points towards the end of the year for “a big push next season”.

    The other bizarre thing is if it turns out O’Connell is actually a great team boss!

  32. oddball says:

    The more digging you do,the deeper you go,and for this one i needed a JCB but i think i have found the truth.
    Its nothing to do with Caterham or Middle east investment but everything to do with Forza Rossa,the rumanian entry into F1.
    The value of Caterham is next years entry and car design. We know that the 2015 car was being thought up in Germany,and who’s factory is this?? Why its Dr Colin Kolles.
    We know that funds have been syphoned off from this yrs revenue and channelled into the next design and only the bare minimum has been used for this yrs car.i would be very surprised if the Forza Rossa entry doe not look like the 2015 caterham.
    It all makes sense once you put everthing together, the fake middle east investment came from Romanian investors, the sudden back swing when the cars are seized as this would have jeopardized next years entry and then there is the fabrication of next years car in another teams factory. I am not just pulling this from thin air, have a look at the Lotus wec entries this year, its a way of develping a race car on the cheap..its legal but its not ethical imho, i dont believe the staff knew what was happening as this guy has more Smoke and mirrors than Paul Danials.
    Any thoughts James?

  33. Jaybee says:

    Well there is another possible way of raising revenue for the financially ailing Caterham team.
    Sell the film rights. Sort of a “Carry On Caterham” or “Mr. Bean goes F1″. Would Rowan Atkinson make a good senior administrator? Your thoughts on format and casting?

    1. Anonym says:

      Geoffrey Faulks (Rowan Atkinson) is a bankruptcy administrator who finds himself thrust into the limelight when a bizarre turn of events sees himself named as Team Boss of an F1 team that had fallen into administration.

      When a grave error by Geoffrey risks to implicate him in a Creditor Repayment plan which actually is not feasible, Geoffrey’s only way out is to see the struggling team win a sizeable cash prize at the end of the ongoing F1 season.

      Allied with an eccentric Technical Director (played by Jeremy Clarkson) and a driver line-up that includes a jaded old charger (Tiff Needell) looking at one last chance to ride into the F1 sunset, Geoffrey Faulks has no choice but to dive headlong into motorsport’s infamous shark pit and compete with the world’s toughest racing teams for victory.

      “The Race is On!”

      1. James Allen says:

        Love it!

        Call Working Title! It’s a must

  34. Jaybee says:

    So, Gurkhas as extras maybe and there must be a guest appearance from Eddie Jordan!!
    Voice overs from Murray, (James & Martin much too sane). Perhaps a previous F1 team principal character, who also had an interest in a football team which attracted some of his time and interest, (the speedo clad photo?) Stephen Fry?, as a suggestion.

    1. Anonym says:

      Eddie Jordan will spend the first half of the film always saying Rowan’s team is “Doomed to fail”, and when they finally score ONE win that seals the much needed position and prize money (with Tiff at the wheel of course), Jordan suddenly says that he “always knew they would come good!”.

      Also repeating gags where Rubens Barrichello keeps showing up and asking if he can drive the car.

      Jeremy Clarkson’s character also comes up with a number of strange and unwieldly aero solutions, which finally come good in the last 3 races. It plays out so that the Team needs to win the double points finale to save Rowan’s skin.

      In the Epilogue we learn that the Jeremy Clarkson character went to Ferrari the following year, Tiff’s character won the Laureus sportsman of the year award….

      and in a cliffhanger…Rowan Atkinson’s character, now seen as some kind of sports wonder-worker, is shown being hired to manage England’s next stab at the World Cup.

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