[Team] Racing Point: What now for Force India

[Mike Harte]

Originally Posted by peebee2

Are you deliberately misunderstanding??

If you bought the Ferrari shares then, yes, you would own Ferrari.

If you started a new company and bought some cars from Ferrari, then you wouldn’t own Ferrari.

The latter is what happened because some of the creditors wouldn’t play the way some wanted them too, and they got totally shafted.

For reasons best known to themselves, it was a number of banks that were the only creditors that failed to complete the required formalities that would have permitted Stroll to buy the team company, lock, stock and barrel. However, they didn't comply which forced Stroll to just rescue the assets.

In doing so, he ensured that the staff kept their jobs and were paid for past services, and, as far as I am aware, all trade creditors were paid in full (or individually negotiated settlements that left both parties sufficiently happy to continue trading with each other).

I will not lose too much sleep that the banks may have lost out!

[Peter Mallett]

Problem is, if one takes Mike's view then arguably as an organiser you could be rewarding corruption. Thus it must be better to treat the new organisation as a new entity.

Wiping the slate clean would be at least a fair and reasonable approach.

If under those circumstances the.new owners don't buy in then the real perpetrators don't escape.

[Mike Harte]

Peter, could you expand, please, as I don't quite follow.

[wnut]

Stewards decision regarding the Haas protest against RPFI:

https://www.fia.com/events/fia-formu...information-21

[wnut]

Originally Posted by Peter Mallett

Problem is, if one takes Mike's view then arguably as an organiser you could be rewarding corruption. Thus it must be better to treat the new organisation as a new entity.

Wiping the slate clean would be at least a fair and reasonable approach.

If under those circumstances the.new owners don't buy in then the real perpetrators don't escape.

It would be easy enough for the organizers to satisfy themselves with a due diligence report from the liquidators.

However, it is nice and profitable for everybody else involved not to, and then we watch another team go to the wall.

[Peter Mallett]

Originally Posted by Mike Harte

Peter, could you expand, please, as I don't quite follow.

E.g. An organisation is using money laundering to finance its team. The courts find that this has been happening and place a winding up order on the business which includes the team. The team finds a white knight who will rescue it but the business behind the team is folded and the owners are found guilty. The team is re-branded.

This change happens in the middle of the season when the team has already racked up a serious amount of points and is due a big payout not only for the points earned, but also because it has been in the championship for a number of years an thus receives "appearance money" at a certain level, above that earned by a team that has been around for only two years.

If the organisers of the championship then allow the re-branded team to earn its "appearance money" for the three years and more, then it could be seen to be rewarding corrupt practices since the team would not have been in that position without the "iffy" funding.

I'm not suggesting that any one of the entities that are the subject of this thread has in fact been found guilty of any of that example or any other corrupt practice, but it is a consideration that the organisers should take into account.

So suggesting that it should go through "on the nod" as it were, would be a risky thing.

[Mike Harte]

Originally Posted by Peter Mallett

So suggesting that it should go through "on the nod" as it were, would be a risky thing.

Ah, didn't appreciate that you were now discussing a theoretical situation. However, I didn't believe that I was suggesting that all team "changes" should go through on the nod, and, in fact, they don't now. Each case presented to the FIA and FOM is treated on it's merits.

But in this thread we are specifically talking about Force India. And it was quite apparent that the company controlling the team was in severe danger of being wound up. Because the banks were unable/refused to co-operate with the administrators, Stroll senior was left in the position that he could only purchase the assets.

But back to the money. It's not the financial rewards for any constructors' points that are annoying Haas, it's the fact that RPFI are not being treated as a totally new entrant, when it is patently obvious to the world and their dogs that they are not a new entrant.

[Racer65]

Originally Posted by Mike Harte

But back to the money. It's not the financial rewards for any constructors' points that are annoying Haas, it's the fact that RPFI are not being treated as a totally new entrant, when it is patently obvious to the world and their dogs that they are not a new entrant.

Not really. It's obvious to me that the FIA have made a massive mess of this. A team is either new or it's not. Nothing the FIA have done fits either scenario.

[peebee2]

Originally Posted by Mike Harte

it is patently obvious to the world and their dogs that they are not a new entrant.

No. Not even remotely.

It is “patently obvious” that they are a 100% new company which has bought the assets of a previous team.

They want to pay £80m or so for those assets, yet receive more than that over the next three years in existing team money. Ie. get a decent team for free!

Either they are a new team or they aren’t. They want to claim both. It has been totally messed up by the authorities, desperate to keep ten teams involved.

[Mike Harte]

And I repeat that the same could be said of Ferrari, Brawn, Mercedes, RBR and so on throughout the history of Formula 1. Teams and their assets are sold and bought by new companies, but the team remains as the original.

[peebee2]

Originally Posted by Mike Harte

And I repeat that the same could be said of Ferrari, Brawn, Mercedes, RBR and so on throughout the history of Formula 1. Teams and their assets are sold and bought by new companies, but the team remains as the original.

Ok troll.

The same could not be said. Those examples you gave are companies that were sold and shares transferred.

Racing Point is not Force India in any way. Never has been. No shares have been bought or transferred.

But clearly you don’t want to get that, see you.

[Mike Harte]

Originally Posted by peebee2

Ok troll.

The same could not be said. Those examples you gave are companies that were sold and shares transferred.

Racing Point is not Force India in any way. Never has been. No shares have been bought or transferred.

But clearly you don’t want to get that, see you.

WOW!

[Akrapovic]

Originally Posted by Mike Harte

Football clubs are not considered new when they get a change of owner.

https://en.wikipedia.org/wiki/Rangers_F.C.

[GingerPixel]

Team builds a brand new factory and starts everything from scratch = new.

Team buys the assests of an old team and 'carries on' under a different name = not new.

[E.B]

New team also guaranteed and made arrangements to settle the old teams supplier debts, re-employed / guaranteed employment to 99% of the previous companies staff and utilise the same premises to operate from.

Different shareholders and slightly different name.
Not sure if Michael Mol retained any of his original 15% of the old business.

[crmalcolm]

I just thought I would have quick look to see what differences there are between Mercedes and Force India.

Companies House tells me the following:

Mercedes Benz Grand Prix Limited was incorporated on 9 January 1964.
Previous names were TYRRELL RACING ORGANISATION LIMITED, BRITISH AMERICAN RACING GRAND PRIX LIMITED, BRITISH AMERICAN RACING GP LIMITED, BARGP LIMITED, BAR HONDA GP LIMITED, HONDA GP LIMITED, BRAWN GP LIMITED

Racing Point UK Limited was incorporated on 2 August 2018.
No previous names.
Force India Formula One Limited was incorporated on 28 October 1998.
Previous names were TOTAS EUROSERVICES LIMITED, JORDAN GRAND PRIX LIMITED, MIDLAND F1 RACING LIMITED, SPYKER MF1 TEAM LIMITED, SPYKER F1 TEAM LIMITED.
This company is now in administration.

So the company behind Mercedes is the same company that existed as Tyrrell.
The company behind Racing Point is a new company.

[VIVA GT]

I suppose the two distinctions here are:
1. What is written down on paper.
2. What has happened in reality, to the team, the personnel and what they do.
In my mind, in reality, Racing Point UK Limited may well be a new company (on paper), but are carrying on doing the same job (building and racing Formula One cars) using mostly the same personnel or team (barring a few necessary exceptions) and using the same premises and suppliers. So are effectively the same original company.
If it's acceptable that Mercedes Benz Grand Prix Limited are effectively The Tyrrell Racing Organisation that operated out of an old woodshed in 1964, then RPF1 are no different (in reality, but may be on paper).

[GingerPixel]

Originally Posted by VIVA GT

I suppose the two distinctions here are:
1. What is written down on paper.
2. What has happened in reality, to the team, the personnel and what they do.
In my mind, in reality, Racing Point UK Limited may well be a new company (on paper), but are carrying on doing the same job (building and racing Formula One cars) using mostly the same personnel or team (barring a few necessary exceptions) and using the same premises and suppliers. So are effectively the same original company.
If it's acceptable that Mercedes Benz Grand Prix Limited are effectively The Tyrrell Racing Organisation that operated out of an old woodshed in 1964, then RPF1 are no different (in reality, but may be on paper).

Exactly. Also, Racing Point is a terrible name.

[Mike Harte]

Akrapovic, I concede that Rangers had difficulties with the Scottish FA, but from what I can remember about the matter (and hating football) that had something to do with the FA's rules about how long a club can remain in administration. Plus some other matters which rumbled on for years.

However, my point is that when, for example, the Glaziers took over Manchester United, the team wasn't suddenly considered to be a new club. Nor also Chelsea when Abramovitch bought it out, nor when Arsenal very recently changed hands.

[Mike Harte]

crmalcolm, it would appear that some posters are obsessed with company, or organisation, names. This discussion, though, is about the racing team that is/was Force India.

As far as your illustration of Mercedes, I assume that you are not trying to imply that Daimler Benz were the true owners of the Tyrrell Racing team, or were the owners when it was Honda?

Teams over the years have changed owners, and regardless of whether shares changed hands, Force India is just another team in that tradition.

[crmalcolm]

Originally Posted by Mike Harte

crmalcolm, it would appear that some posters are obsessed with company, or organisation, names. This discussion, though, is about the racing team that is/was Force India.

As far as your illustration of Mercedes, I assume that you are not trying to imply that Daimler Benz were the true owners of the Tyrrell Racing team, or were the owners when it was Honda?

Teams over the years have changed owners, and regardless of whether shares changed hands, Force India is just another team in that tradition.

My point is, there is a difference in the legal standing of the companies behind the teams.

The legal entity that is Mercedes F1 is the same legal entity that used to be called Tyrell.
The legal entity that is Racing Point would not be recognised as the same legal entity that was/is Force India.

Racing Point did not buy the shares of Force India and carry on operating (in the way that Brawn>Mercedes happened), but bought the assets of the company and took their place on the grid.


Force India Formula One Team Limited is a company with 80,010,000 shares all held by Orange India Holdings.

Racing Point UK Limited is a company with 1 share, held by Racing Point UK Holdings Limited.
Racing Point UK Holdings Limited is a company with shares held by Silas Kei Fong Chou, Mr Lawrence Sheldon Strulovitch and Jonathan Andrew Dudman.


The shares in Force India Formula One Team Limited were not sold, so ownership of the company has not changed.

[Richard C]

I have been watching the past day or so of posts with some fascination. I really wish I knew more about the topic so that I could post correct information in depth. But I want to jump in so apologies in advance if I get parts of this wrong...

Originally Posted by Mike Harte

crmalcolm, it would appear that some posters are obsessed with company, or organisation, names. This discussion, though, is about the racing team that is/was Force India.

Actually, I think the recent discussion is around how F1 handles entries, points and monetary payouts to "teams" and what constitutes a "team" and the continuity of a "team" or better yet a "continuous entry into the championship" from the perspective of the Concorde agreement. With the FI case being the example of this. And company names, legal entities and who holds the "entry" is absolutely key to this discussion.

Originally Posted by Mike Harte

Teams over the years have changed owners, and regardless of whether shares changed hands, Force India is just another team in that tradition.

If you view it from the perspective of IP assets, physical locations and to a large extent staff, then yes. If you define a "team" in that way then you can trace lineage over various owners and names. There is nothing wrong with doing it that way and I do it that way at times as it helps from a historic perspective. And that lineage is real and important.

But that problem is... while that definition is great for fans like us, IMHO, it means close to zero for this discussion given the discussion should live within the constraints of the Concorde agreement as that drives things like entry into the championship and payouts.

(Entering territory that I might get specific details wrong...)

Overall, I think some people want it both ways. They want to (1) Ignore various contractual provisions around what constitutes a team from the perspective of entry into the championship and how that should have applied to FI changing ownership and getting a new entry and (2) Hold Haas to the existing Concorde agreement and expect them to wait for payment. Those two are at odds with each other.

My understanding (and I think people can debate both sides of this) is that FI was no longer meeting the terms that allowed them to continue in the championship. Additionally (I don't know the details), various entities (banks?) prevented a smooth transfer of everything from owner A to owner B to allow things to happen in way that fits within the proscribed (traditional?) process for team ownership change. I could be wrong, but I think one thing held hostage was the actual "entry" as that is a major item that can be used as collateral with a bank. And a bank refused to give it up. To the letter of how it should have worked, FI should have been dead as an F1 entrant. You can buy the assets/IP, pay the staff salaries, etc. but they should have stopped being an F1 entrant under the new ownership as they didn't have an entry until a new one was created for the new entity.

But because "most" of those involved (fans, employees of FI, F1 as a business, etc.) didn't like how this "should" turn out, there was some level of hand waving to allow things to move forward. If I remember correctly that they get an entry into the championship, clean slate on championship points (?), but they apparently still get the prior monetary rewards as if they were a team with a continuous entry. So it seems they did it half way. Sort of like a new team, but not really like a new team. And that was the rub.

Haas, who has been playing to the full letter of the agreement as a new team, gets screwed, or at least they see others get a deal that they were told they couldn't have. So they have to wait and wait and wait to get championship payout while a "new FI" got a free pass.

To be honest, I fully see both sides on this. I think Haas is getting the short end of the stick in that they are living up to their end and having to wait quite a long time to get payouts. While FI (sadly) became a financial mess and should have had to re-enter and NOT get championship money.

But... given I feel F1 is completely broken and how the Concorde agreement works and the payout scheme is a large part of it (this is just one example of why it is broken) and that a "new" team is a STEEP uphill climb to be successful, and because everyone loves FI, they found a way to keep them in the sport and in a way that puts them on better financial footing.

Frankly I think the way to solve this (but it will not happen) was to have been to pay out Haas early at the same time they cut FI a financial break. But that would just break the entire thing as it would be a second "exception" to the agreement and would likely stir up more trouble.

Apologies again if I get details wrong.

Richard

[Richard C]

Lastly... I should have also said that I don't know how the Concorde Agreement handles things like agreements for a new entry. Lets say for sake of argument that a new manufacture said they want to be a new entry. They might negotiate immediate championship payout vs. having to wait X years. The existing agreements with the other teams may not prevent Liberty from doing this. It may not be "fair" and it may steam someone like Haas, but depending upon how the contracts are written they may not be able to do anything other than get mad.

So unless Haas's agreement precludes any new entrant from getting a faster payout, Liberty may have been able to do what they did and give FI a new entry into the championship but pay them out as if they were a continuous entry.

Richard

[bjohnsonsmith]

So in a nutshell, the company behind Racing Point is a new company but the shares in Force India Formula One Team Limited were not sold, so ownership of the company has not changed.

[S griffin]

Is this like the Andrea Moda/Coloni saga all over again?