Caterham F1 team face battle over cars

Reuters News
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Posted: Oct 21, 2014 3:55 PM

By Alan Baldwin

LONDON (Reuters) - The future of the struggling Caterham Formula One team was thrown into further doubt on Tuesday when an administrator laid claim to their race cars and warned they could not leave the factory without his agreement.

Team sources disputed that, however, and said they should not be affected by legal action involving a separate company to the one that holds the official entry rights to the championship and owns the cars.

Finbarr O'Connell, appointed on Friday as a joint administrator of Caterham Sports Limited (CSL) for London-based Smith & Williamson, told Reuters he hoped the situation could be resolved in the next few days.

The cars are due to leave the factory in central England at the weekend to be flown to Austin, Texas, for next week's U.S. Grand Prix.

"My legal advice is that I own the cars and won't be allowing the cars out of the factory until I reach an acceptable agreement," said O'Connell, who added that meetings were scheduled in London on Wednesday.

He said the factory at Leafield, which was also home to CSL, was being guarded by private security that included retired soldiers from the Gurkha regiment.

Caterham have been fighting for survival since July, when Malaysian entrepreneur Tony Fernandes sold the team to a secretive consortium of investors advised by former F1 team principal Colin Kolles.

The team are 11th and last in the championship, without a point, and their off-track problems were highlighted earlier this month when bailiffs seized items from the factory in an action against CSL.

Caterham's new owners argue that CSL was effectively a service company that manufactured the cars and employed staff for Malaysian-registered 1Malaysia racing Team (1MRT), who own the entry rights.

Sources close to the team repeated on Tuesday that CSL going into administration should have no impact on their racing activities because the cars belonged to the entry holder.

"(The administration) should not affect the F1 operation because it is a completely separate company," said one senior source.

O'Connell said CSL's debts to creditors, with Malaysia's EXIM Bank to the fore, amounted to some 15 million pounds ($24.19 million).

"We are allowing 1MRT to use our facility while we negotiate a settlement," said O'Connell. "They need to reach an agreement with us."

(Reporting by Alan Baldwin, editing by Pritha Sarkar)