Caterham in USGP doubt as dispute continues

Speedcafe.com

Thursday 23rd October, 2014 - 11:47pm

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Caterham F1 team could miss US GP as legal dispute continues

Caterham F1 team could miss US GP as legal dispute continues

The Caterham F1 team‘s participation in next weekend’s US Grand Prix is in increasing doubt after staff were locked out of the squad’s Leafield factory.

This is the latest development in a feud between the team’s current owners and administrators, who were brought in earlier this week after Caterham Sports Limited, a company which services the cars, went into administration.

The closure of the factory arrives less than 24 hours after the team’s current management released a strongly worded statement saying the new owners would walk away from the outfit.

New owners Engavest SA suggested former owner Tony Fernandes had not honoured agreements during the sale process, with a further statement issued on Thursday claiming that the entrepreneur remains the owner of the team and “is fully responsible for all activities”.

“On 29 June 2014 Engavest SA signed a Sale and Purchase Agreement with Tony Fernandes and the Caterham Group to acquire the shares of 1Malaysia Racing Team/Caterham F1,” read the statement.

“Engavest SA has fulfilled all the conditions precedent, including paying the purchase price for the shares.

“The shares have not been transferred and therefore Mr Fernandes remains the owner of Caterham F1 and is fully responsible for all its activities.”

Fernandes has responded to the allegations by issuing a counter statement claiming Engavest SA had not fulfilled their obligations of the sale agreement.

“In June 2014, I decided, together with my co-shareholders, to sell my stake in the Caterham F1 team,” Fernandes said in a statement.

“We agreed in good faith to sell the shares to a Swiss company named ‘Engavest’ on the basis that Engavest undertook to pay all of the existing and future creditors, including the staff.

“The continued payment of staff and creditors was so important to me that I ensured that the shares would not be transferred to the new buyers unless they complied with this condition.

“Sadly, Engavest has failed to comply with any of the conditions in the agreement and Caterham Sports Ltd (the UK operating company of the F1 team) has had to be put into administration by the bank, with large sums owing to numerous creditors.

“Our agreement with Engavest was very clear: there was no legal obligation to transfer the shares to them unless certain conditions – which included paying creditors – were met. Those conditions have not been met. Our lawyers have asked Engavest several times to comply with these conditions but they have failed to engage.

“If you agree to buy a business, you must pay its bills. They have breached that promise and now, sadly, it is others such as the employees and the fans of the Caterham F1 team that will suffer if the team ceases to race.

“I sincerely hope that this will not be the case and that a solution can be found.”

It is understood talks between the team’s management and administrators from London firm Smith and Williamson are ongoing.

However, a deal must be struck before administrators will allow the cars to be released from the factory to compete at the Circuit of the Americas next weekend.