Geoff Rowley and Geoff Carton-Kelly, partners of FRP Advisory LLP, the specialist restructuring and recovery firm, have been appointed joint administrators to Manor Grand Prix Racing Limited, trading as the Marussia F1 Team.
“With the Marussia F1 Team now in administration, the joint administrators have assessed that, given the current financial circumstances of the Group, it is not viable for the Marussia F1 Team to participate in the next race, the 2014 Formula 1 United States Grand Prix, due to take place this weekend in Austin, Texas,” said Rowley.
The company will continue to operate while the joint administrators assess the longer term viability of the company in its present form. The key question now is whether or not Manor Grand Prix Racing Ltd (registered company number 6661964) was the signatory to the Concorde Agreement in 2009 when it first entered F1. This is important because while a signatory company can change its name, it cannot transfer it rights to other companies and so if this is the same company (which appears to be the case) then, in all probability, the team’s rights, obligations and benefits all terminate immediately if the company is declared to be insolvent. Administration is a rescue mechanism for insolvent entities and so it is fair to say that the company is insolvent. The details of the bilateral agreements between the teams and the commercial rights holder are secret, but we believe that there is a clause that terminates all rights if a team is insolvent. Thus the entry evaporates and is not available for sale. Thus the team cannot simply turn up at future races and take up where it left off.
The administrators say that no redundancies have been made and that all staff have been paid in full to the end of October. The ongoing staff position will however be dependent “on whether the company can secure new investment in the limited time available.” It is not clear what the Administrator means by this, but it might either mean that the entry is held by a different company (which does not appear to be the case) or that they have not yet had a chance to read the various agreements.