[Team] Racing Point: What now for Force India

[broadrun96]

Originally Posted by Mike Harte

A link to this would be appreciated.










An explanation of what you are trying to say would be appreciated. Some of it doesn't seem to make sense.


And this article from the BBC throws some light on why the three teams are not happy with the proposals about the changes to the ownership of Force India. It's not just about the money. https://www.bbc.co.uk/sport/formula1/45026461

Racefans, racer.com, autosport all had references to it in their articles, love this demand I provide you with detailed references and dates on who said what. Multiple sources have all agreed and others have tweeted similar info, it's not my job to keep you up to date because reading multiple sources is hard.

And if you believe any of them are acting for the good of anything beyond their wallet I have some swamp land to sell you. It's purely about the money and the team finished above them, full stop, no other reason and I lose ANY respect for the teams that say otherwise.

[Mike Harte]

Chilli, I think that the reason that Renault are aligning themselves with McLaren and Williams is that, budget wise, they fall into the same category. Meanwhile, Mercedes and Ferrari are in a different league and, so it seems, are acting together off track to the detriment of all the other teams. And Renault don't want to join their club!


It's not known as the Piranha Club for nothing!

[Mike Harte]

Originally Posted by broadrun96

Racefans, racer.com, autosport all had references to it in their articles, love this demand I provide you with detailed references and dates on who said what. Multiple sources have all agreed and others have tweeted similar info, it's not my job to keep you up to date because reading multiple sources is hard.

You misread what was written.


Stroll Snr had offered a loan to Force India to be secured against 51% of the assets of Force India. However, because of the legal proceedings being taken by the Indian authorities against both Roy and Mallya and their transactions involving Force India, Stroll would not be permitted to take a lien against the assets of Force India. The loan may have been used to pay salaries, but that was not the sole purpose of the loan; it was to keep the team afloat.

[chillibowl]

Originally Posted by Mike Harte

Chilli, I think that the reason that Renault are aligning themselves with McLaren and Williams is that, budget wise, they fall into the same category. Meanwhile, Mercedes and Ferrari are in a different league and, so it seems, are acting together off track to the detriment of all the other teams. And Renault don't want to join their club!


It's not known as the Piranha Club for nothing!

haha true!

agreed in terms of budget Renault, is on a far lower scale than Ferrari and Merc but time will tell if Renault are that much different than Merc or Ferrari in regards to how they view their commercial/supply opportunities in F1.

i believe Renault will have an extra PU supply for next year and i would imagine they want to sell it...we will see who takes it and what other Renault parts and fuel supplies that they take as part of the deal.

i suppose we will be able to judge the sincerity of their stance against satellite teams then.

certainly, imo, i dont think Renault would be taking this stance if Force India had a Renault deal.

[chillibowl]

bit of an unrelated question...

lets say FI winds down/becomes insolvent...then according to the concord agreement the new buyer (if there are new buyers) would not be entitled for payments based on FI's prior finishing record.

to circumvent this issue, Liberty would need unanimous consent from all the other teams to amend this.

this is the normal procedure (i think).

so my question is why Liberty would need this when they can presumably just sign a side deal with the new owners to give them this money before the FOM profits are allocated to the prize fund for future distribution? or perhaps even a signing bonus (in lieu of money they lost out on due to lack of unanimous consent) if the new buyers sign the next concord agreement early.

it seems to me this is what Bernie did and was able to make 'special' payments to any team he wanted to out of the fund.

so i guess my real question is if there any mechanism preventing this?

and if not, then isnt this all a bit of a storm in a teacup? or rather the fault here lies at the feet of Liberty as opposed to Williams, Mclaren, and Renault.

[broadrun96]

Originally Posted by chillibowl

bit of an unrelated question...

lets say FI winds down/becomes insolvent...then according to the concord agreement the new buyer (if there are new buyers) would not be entitled for payments based on FI's prior finishing record.

to circumvent this issue, Liberty would need unanimous consent from all the other teams to amend this.

this is the normal procedure (i think).

so my question is why Liberty would need this when they can presumably just sign a side deal with the new owners to give them this money before the FOM profits are allocated to the prize fund for future distribution? or perhaps even a signing bonus (in lieu of money they lost out on due to lack of unanimous consent) if the new buyers sign the next concord agreement early.

it seems to me this is what Bernie did and was able to make 'special' payments to any team he wanted to out of the fund.

so i guess my real question is if there any mechanism preventing this?

and if not, then isnt this all a bit of a storm in a teacup? or rather the fault here lies at the feet of Liberty as opposed to Williams, Mclaren, and Renault.

I think you would see Liberty either pay or loan the team the exact amount they would have been awarded under the agreement and tell Williams to pound sand about their legacy payment. Williams is looking very short-term and not thinking about their payment future and Bernie isn't in charge any more.

[broadrun96]

Originally Posted by Mike Harte

You misread what was written.


Stroll Snr had offered a loan to Force India to be secured against 51% of the assets of Force India. However, because of the legal proceedings being taken by the Indian authorities against both Roy and Mallya and their transactions involving Force India, Stroll would not be permitted to take a lien against the assets of Force India. The loan may have been used to pay salaries, but that was not the sole purpose of the loan; it was to keep the team afloat.

No, what was tweeted by Chris and others was his action would not have been allowed under Indian law for exactly the reason you state. Somehow because you said it wouldn't be allowed to due not getting the lien, a basic tenant a loan in most cases, it's correct but when I said the SAME THING, I'm wrong?? Wow, do you always speak down to people or jut people online you think know less than you. And someone who asked a friend in international banking about the general idea of what was tweeted and was told the loan would not be approved as collateral requested has a prior lien on it. I actually do my homework and read before I post. Sorry you want it all spoon fed to you.

[Mike Harte]

Chilli, the answer is that Force India was, and might still be, insolvent. That is why the winding-up petition from the tax authorities (HMRC) was due to be heard in the commercial court. They dodged that bullet by finding enough cash to satisfy HMRC in full or part, but they obviously have a list of creditors waiting for their money.


Perez only stepped into the breach in the court because he hasn't had all his payments from the team for last year. How long was he meant to hold on.


The only payments that FOM made to any teams was the monies due to them. Sometimes, when all the other teams agreed, those payments were made early to a struggling team. But, as far as I am aware, FOM made no other "special" payments.


However, to the great credit of Mr E, he personally provided funds to a number of teams throughout his time at FOM. For example, he paid all, the salaries at Manor for at least one month, although something nagging at the back of my mind thinks that it was at least 3 months.


But those things he did privately and outside the glare of publicity. He was many things, but he cared deeply about trying to keep teams in F1 despite what he may have said in public. And provided that you remained on good terms with him, he could and would be a very good friend to the teams. You didn't have to always agree with him and you could have a reasoned argument with him, but as long as you respected his position in the F1 hierarchy and didn't try to insult him, he would remain a true friend.

[justracing]

Surely anyone willing to invest in rebuilding Force India would not regard the loss of payments as a major issue since the team can be bought for something like 20% of its market value. I believe their debts amount to around £43 million and VJ was asking circa £250 million.
Joe Saward hints at this scenario
https://www.motorsportweek.com/joesaward/id/00287
Certainly someone on here has the daggers out for team Willy purely on an interpretation of their own. In my opinion Williams, Mclaren and Renault are perfectly justified in their actions in accordance with the existing concorde agreement. If it were my company under threat I would fight tooth and nail to gain any advantage, as has already been said, it is the piranha club!

[GTRMagic]

What would give rise to a valuation of this team at a 250m pound level though?

It costs money to participate, so buying the team will never supply a financial return at this level, regardless of any external monies brought onboard (not that there seems to be too much spare real estate to plonk on new stickers)

[wnut]

Originally Posted by chillibowl

it might be a moot point that Williams and Mclaren are making (this ship for satellite teams has already sailed) but nevertheless, i find myself agreeing with their sentiment.

along with Red Bull, these are the only teams with the clout to stand up to the manus and personally i think they deserve more support from the fans in this....surely most of us agree that the manus hold too much control as it is.

the one thing i really dont understand is why Renault is taking issue with this.

surely as a manufacturer they are looking to lock up suppliers for themselves and the more parts they can sell and thus defer the costs of their own works program the better.

if they feel strongly about this then they should advocate for a lower engine cost formula. rather they could work towards eliminating the conditions (high costs) that make running a satellite team a viable option.

but they are not going to do that. selling engines and parts is far too profitable.

Exactly and just look who Force India's biggest creditor is, Mercedes, the engine manufacturer.

[Moneyseeker]

Originally Posted by broadrun96

I think you would see Liberty either pay or loan the team the exact amount they would have been awarded under the agreement and tell Williams to pound sand about their legacy payment. Williams is looking very short-term and not thinking about their payment future and Bernie isn't in charge any more.

Under carefull what you wish for regarding Williams position, IF the grid fell to 18 cars and with no prospect of a new team or manufacturers on the horizon, Liberty could revisit one of BE's proposals which was the 'works' teams of Renault, Mercedes and Ferrari - run a 3rd car each, that would really give Williams and McLaren something to think about....


a) Because they would be another 3 cars further down the grid
b) The works team would ask for more FOM cash to run a 3rd car each, thereby leaving less for the rest of the teams

[justracing]

Originally Posted by Mike Harte

Chilli, the answer is that Force India was, and might still be, insolvent. That is why the winding-up petition from the tax authorities (HMRC) was due to be heard in the commercial court. They dodged that bullet by finding enough cash to satisfy HMRC in full or part, but they obviously have a list of creditors waiting for their money.

If I read the situation correctly Force India are not insolvent they are in administration.

From Joe Saward's blog:
"The first thing is to decide whether or not Force India has ever been insolvent, under the law. This is defined by the Insolvency Act of 1986, in which Article 123 covers the definition of insolvency and the process that exists to get there. In order to file a winding-up petition, a creditor must have evidence of what is called a Statutory Demand for money. The company has 21 days to pay. If this is not done, then the company is deemed to be insolvent and the creditor can then apply for a winding-up petition to get the money by the sale of assets after the company is closed down. Thus a winding-up petition is a pretty good indication that a company is (or was) insolvent, during the 21 days given to pay a Statutory Demand. However a winding-up petition is not valid unless it has been advertised in a publication called the London Gazette. If the winding up petition has not been advertised in the London Gazette then the court will not make the necessary winding up order. The winding-up petition may be advertised in court listings but this is not legally the same as it being in the London Gazette. And if an administration petition arrives instead, it can trump the winding-up petition. Thus was the company legally insolvent, or not?"

Under the terms of administration the team can be rescued by someone with deep pockets and would be eligible for all the FOM performance payments.

The argument from Williams, McLaren and Renault is more a dispute about a front runner(Mercedes/Ferrari) picking them up cheap and running it as 'B' team. Toto Wolff has already stated that they have no intention of doing this although by all accounts they are Force India's biggest creditor. Were this to happen it would effectively push team Willy and co further down the grid in terms of the performance gains to the factory supported team. As to the ridiculous assertion that Williams are objecting purely to achieve a financial gain, I think is way off the mark.

[Mike Harte]

Originally Posted by justracing

If I read the situation correctly Force India are not insolvent they are in administration.

A company is insolvent when it is unable to pay it's bills and/or once it's liabilities exceed it's assets. And the company's accountant, whether internal or external, should advise the directors that they are or will be trading whilst insolvent, which is an unlawful act.



What Saward is highlighting is the technical route for declaring a company to be insolvent.


The two are not exactly the same.

[greentrumpet]

Gotta feel sorry for Williams, possibly losing their best source of funds and their top driver in one hit.

[justracing]

Originally Posted by Mike Harte

A company is insolvent when it is unable to pay it's bills and/or once it's liabilities exceed it's assets. And the company's accountant, whether internal or external, should advise the directors that they are or will be trading whilst insolvent, which is an unlawful act.



What Saward is highlighting is the technical route for declaring a company to be insolvent.


The two are not exactly the same.

Absolutely agree but here we are considering the exact letter of the law and technically at present they are not insolvent. I realise it's a bit of a mute point but under the terms of the concorde agreement it can have quite a lot of financial ramifications.

[steve_r]

Originally Posted by greentrumpet

Gotta feel sorry for Williams, possibly losing their best source of funds and their top driver in one hit.

For all the good the money it is doing them... They were pushing Mercedes in Austria for the win a couple of years ago, and now with the benefit of the Stroll money, they are on the back row of the grid.

[Peter Mallett]

I just checked. This saga has been going on since March 2016.

[Dixon9]

F1 would be more interesting if Ferrari, Mercedes and Renault were suppliers only and not factory entrants.

I've never been a fan of only 4 seats being able to challenge for titles, and realistically 2 because of orders.

Long live the colourful midfield.

[wnut]

Originally Posted by Dixon9

F1 would be more interesting if Ferrari, Mercedes and Renault were suppliers only and not factory entrants.

I've never been a fan of only 4 seats being able to challenge for titles, and realistically 2 because of orders.

Long live the colourful midfield.

And even more realistically one contender because of complete technical superiority!

[GTRMagic]

A Player For Force India?

[dsg]

Originally Posted by GTRMagic

A Player For Force India?

Is there anything to suggest he's interested in financing a Formula One team?

If we're doing this for every Indian billionaire it could take a while.

[GTRMagic]

Originally Posted by dsg

Is there anything to suggest he's interested in financing a Formula One team?

If we're doing this for every Indian billionaire it could take a while.

There is a sporting interest there... it’s the closest thus far..

[BSchneiderFan]

Is there any reason to think Force India will be bought by an Indian concern? No-one has been among the rumoured buyers. Myself, I’m rather hoping for Michael Andretti.

[Formulahistory]

I also hope for Andretti – that would be awesome!