Tony Fernandes has responded to the Caterham press release saying on Twitter that “If you buy something you should pay for it. Quite simple”. This does not help the situation. The team was worth next to nothing when the owners acquired it in June. The impression given was that the previous owners wanted to get out without spending more money. If the sale has not been completed, as he is suggesting, then the team still legally belongs to The previous owners and so they are responsible for the mess in the UK and they can solve the problem by paying the bank that has called in the administrator.
If the sale has been completed properly then the shares should have changed hands, as would normally happen. Clearly there is more to this than meets the eye but all of these questions should be answered by the paperwork relating to the sale. If there were hidden debts that were not included in the documentation, there is possibly scope for legal action. If there were pledges on shares then these should have been declared in the sale contract.
We will have to wait to see the rights and wrongs of the situation. However, this does not help the staff of Caterham, who seem to be stuck between the two parties to the sale. The danger is that this dispute will now mess things up and the team will close and jobs will be lost.
joeblogsf1 
RIP Caterham F1 racing team.
By the time the legalities are sorted the cash will have long dried up and unpaid staff moved on.
I thought TF was an honorable business leader, the implications make it sound otherwise.
Joe, where is Mike Gascgoyne in all of this – is he lost to F1?
Well, he hasn’t been in F1 for more than a year
He’s moved to their yachting operation – an adjunct of Caterham Composites IIRC…
ive lost a lot of respect for Tony Fernandes. I loved his dream and hope for team lotus. but once he had his new toy QPR he destroyed the team.
what will happen to QPR when they go down again, maybe fall back in love with west Ham ?
Why did Fernandes put out that press release saying that he (and the road car company) had nothing to do with the F1 team if he still owned it ?
No-one is going to come out well from this.
I heard it sold for £1, can’t see that being a problem to raise.
This has happened before when Colin Kolles has been involved, in fact he does not really have a great track record when it comes to F1 teams. Not saying it’s his fault but, here we go again.
Frank Williams had a lousy track record at one point as well…
Seems to me that Colles has often worked quite a bit of magic just to keep teams going – easy to have a bad track record when your working with teams that everyone has given up on.
Is this the first of several team failures were about to see?
Do the mythical Middle East / Swiss investors actually exist? I’ve heard nothing to convince me it isn’t just a wing it and see if some money turns up operation. Or something worse if you’re being cynical. Also seems like Fernandez has abandoned his employees. At least Honda and BMW departed respecting their employees and without leaving grubby mess all over the carpet. ‘Caterham F1’ makes no sense. Less sense than Morgan F1. But while we’re at it Marussia makes no sense either. It’s like having TVR F1. And it probably doesn’t make sense to run an F1 team out of Switzerland. Hope we don’t see this affecting the feasibility of other teams, like the first domino. Hope there are 20 cars next year. I don’t fancy seeing 3 Mercedes drivers on the podium every other race. Some teams are run quite efficiently, and could turn up and be within 107% on small change out of CVC Capital’s pockets. But is this the way to run a global sport, Bernie?
Is it totally wrong to assume that ownership has to be established with the FIA before any team is given accreditation? Does this happen when there is a change of owner?
Just asking
No idea
Constantin Cojocar, a Romanian handball trainer, is listed as the sole director of Caterham Sports Ltd, having taken over from Kolles on Sept 23. What on earth has he to do with this?
Are you sure it is the right Constantin Cojocar?
No, I did read it somewhere, but the source may have jumped to that conclusion.
I even saw one report on the Administrators (BBC, Reuters? Not sure) mentioning he (the Cojocar who became director) had been a cleaner at the Caterham/Leafield factory before.
But its hard to know exactly who is who without a bit more background study. And then it seems there is still a lot of murky water to dig through to untie strings, find knots and hopefully save the jobs of all the hardworking people at Caterham who have had a hard time already and I fear are now in for a pretty desperate holiday season.
I have heard it, but not reported it because I don’t know if it is true. Ditto that he is a former footballer. Just because it appears on the web does not make it true.
Certainly seems to be the more sensible/responsible journalistic approach Joe.
Fact remains, apart from being Romanian (and therefore some tie in with Kolles) we know very little of the current director, Mr. Cojocar, or his motivations and targets apart from what was published from his communication with the Administrators. Which in itself is not a great sign (just as the buyers being secretive about themselves is not a positive sign IMO)
Mr Cookiejar is entirely irrelevant
Cookiejar – nice one Joe. He might just be a poor sod stuck in the whole thing as well, yes.
Important is who wanted the entry and how much are they willing to pay to get/keep it alive, I guess.
Is it reasonable to think that the timing of the whole thing (i.e. possibly blocking them to race in Austin and the following 2 races) is on purpose, because Fernandes / the banks / debtors/ the Administrator etc know full well that that is the only way to put pressure on (as failing to race makes it completely worthless as the licence would be gone)
As I understand it – and I may be wrong because all this stuff is confidential – a team can miss three races in a season without losing its rights and benefits. However, missing the last three races makes no sense for Caterham as they will end up 11th and lose most of their benefits anyhow. Going to the races keeps that chance alive.
Thanks for the answer there Joe. So even missing races does not have to mean the licence is void then (probably, as contracts are confidential)
I would certainly think that as long as the cars can run, actually having them on track and getting money from drivers to drive them would be more profitable then not having them out there!
Ring the administrators and tell them that. I think they may be on a steep learning curve about F1
Joe you forgot to mention the suppliers that’ll also be owed millions in this and the knock on effect that has too
I have mentioned them in the most recent post
Due diligence, just saying 😉
“If you buy something you should pay for it” — the only rational explanation I can think of for that statement is something along the lines of “You got the team, assets and entry for $1 and the assumption of the debts — now you need to pay those debts.”
If this is the case, and if Tony’s lawyers got Engavest or whoever they are to waive their rights to further due diligence, then it may be simply that the buyers got greedy, thought they were picking up a pearl at a steep discount, and didn’t look closely enough at the web of obligations to realise that they were getting mostly heavily-mortgaged paste.
However, if the previous owners concealed or obscured the nature or extent of the debt obligations that the buyers were letting themselves in for, then Engavest would presumably have a whacking great damages claim — all the more so if the team collapses and the name of Engavest becomes a hissing and a byword.
All told, a nasty business that doesn’t reflect well on buyers or seller…
Surely this must make things easier for Haas F1? A new UK base? One less lower tier team to beat in order to get a nice check from Uncle Bernard….
A real shame. I so enjoyed the promise.
Joe, has this episode would have changed your impression of Tony Fernandes? You used to once regard him highly at the time when the team was formed and a year later when it had the naming rights clash with Dany Bahar and the current Lotus F1 Team…
It is true that I thought very highly of him.