Caterham F1 factory closed, team's fate in the balance

Reuters News
Posted: Oct 23, 2014 6:10 AM

By Alan Baldwin

LONDON (Reuters) - Caterham Formula One employees found their factory closed on Thursday but a legal administrator overseeing the property held out hope that the struggling team might still survive.

Finbarr O'Connell told Reuters various parties had approached him to express interest either in the assets or keeping Caterham racing as an F1 team and negotiations were ongoing.

"They (the staff) can't get into the factory today," said the joint administrator of Caterham Sports Limited (CSL), a company that makes and services the cars for entry holder 1Malaysia Racing Team (1MRT).

"They (1MRT) are using my facilities and haven't paid me," added O'Connell, a restructuring and recovery partner with London firm Smith and Williamson.

He said the factory would be reopened if a deal was reached after meetings on Wednesday with lawyers and representatives of 1MRT failed to find an acceptable solution.

Management of 1MRT issued an explosive statement on Wednesday, threatening to walk away and take legal action against Malaysian team founder Tony Fernandes.

They accused him of failing to transfer ownership following an announced sale in July and said he was now responsible for the team.

Fernandes, a high-profile entrepreneur who runs the AirAsia airline and is chairman of struggling Premier League soccer side Queens Park Rangers, told the BBC on Wednesday night the statement was 'garbage'.

The war of words indicated the team had entered a new and potentially terminal phase, with cars and freight due to be sent to Texas at the weekend for the U.S. Grand Prix in Austin.

There are two races remaining after Austin and Caterham will be in breach of contractual agreements if they do not show up.

Team sources say the race cars are inside the Leafield factory but O'Connell, who has said they cannot leave without his permission, suspected there might be 'a few chassis' elsewhere and he was investigating that.

He insisted that despite the air of crisis, there was still time to find a solution.

"Effectively 1MRT have been in the building for last few days since I arrived," said the administrator, who was appointed last Friday.

"We are trying to reach an acceptable arrangement for them to be there. We had a meeting yesterday with 1MRT and lawyers and the offer they made was unacceptable. So I've sent them away.

"Hopefully they can come up with an acceptable proposal."

"I don't think this is gone," said O'Connell of the team's prospects for survival. "It's just a case of who has got the money to make it work."

(Editing by Sudipto Ganguly)