The impasse between representatives of Caterham F1 and the the court-appointed administrators, Smith & Williamson, has been broken, although the consequences for the F1 team’s future remain unclear.

A statement released this morning simply says that “..representatives of 1MRT/Caterham F1 Team have agreed, with all rights reserved, to hand-over management of the Caterham F1 Team to the administrator Mr Finbarr O’Connell in the higher interest of allowing the team to continue operating and preparing for the next events.”

This follows yesterday’s comment by O’Connell, “I think everybody’s got to rally together in order to find a solution to this. It’s a very expensive sport, but you’ve got to pay your suppliers, you’ve got to pay your employees and then you can go racing.”

“If 1MRT reaches acceptable terms with me they can be back in the facility and it won’t be in limbo. The cars have to go off to the US very soon and they’re cutting it very fine.”

It seems that apart from the administrator gaining control of 1MRT, no money has changed hands and therefore little in effect has been resolved. O’Connell’s push to gain control seems to have backfired, since he now finds himself responsible for a business which he has neither the means nor the knowledge to run.

We’ll await further news in due course, but it seems unlikely that they’ll spend any more money to compete until a new financial backer is found.

With far more F1 prize money on the line (for 10th place in the championship) than the amount owed to creditors, they need to act quickly. The next two races look unlikely (US and Brazil), but the Abu Dhabi grand prix is on 21st November where double points are available.

Tony Fernandes and Caterham Group still own the team, therefore all that’s been achieved is to wrestle it away from those who wished to invest and hand it back to those who wanted rid of it. Whose fault that is will be a mute point when in a few weeks time there’s little left (of any value) to argue over.

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Oct 23, 2014  –  


A court document published last night on Adam Cooper’s F1 Blog, shows that Caterham F1 (under Fernandes’ stewardship) owed more than £256,000 in unpaid legal fees to law firm Macfarlanes LLP. While not unusual for a going concern to accrue debts and include these in a sale, the amounts date back over 4 years to May 2010.

Despite the sale of Caterham F1 Team / 1MRT in June 2014, the legal transfer of shares never took place. This contrasts with announcements made by Caterham Group that they were no longer connected with the team – although Fernandes then contradicted this in his tweet last night.

The Buyer, who we now know as the Swiss company Engavest SA, were therefore left in “..the invidious position of funding the team without having legal title to the team it had bought.”

CSL provided much of the engineering resources and infrastructure to support the Formula One licence holder 1Malaysia Racing Team Sdn Bhd (1MRT), also known as Caterham F1, but were in fact a separate legal entity.

Although the F1 team remained based at Leafield Technical Centre (alongside CSL), they set up a new company, Caterham Cf1 Grand Prix Limited (CCF1), into which around 200 staff from CSL were recently transferred. It is unclear whether this transfer was in fact legal, given that it leaves CSL with debts of £15 million ($24.19 million) and no ongoing operational business to service them. The administrators are therefore leaning on the assets at Leafield, using them as a bargaining chip to agree the best solution for all parties.

READ ALSO: How to decimate your brand – a case study by Caterham

“Clearly, the parties who bought the business from Tony Fernandes have been unable to fund this company,” said Finbarr O’Connell, restructuring and recovery partner at Smith & Williamson. But according to Engavest, the position they were placed in by Fernandes has had a ‘devastating’ impact on the team’s prospects and undermined their attempts to fund a business which they did not yet own.

They are now taking legal action to pursue Fernandes for the costs and damages which they have subsequently incurred, accusing him of not honouring agreements despite “operating the Caterham F1 Team in good faith.”

Shortly after last night’s announcement, Caterham F1 team boss Manfredi Ravetto stepped down from his role and tweeted, “22 Oct 2014, Caterham F1 Team: proud having led such an extraordinary group of people although for just a few weeks!”

It now looks unlikely that the team will compete at the next grand prix in Austin on October 31st. The cars were due to leave the factory and fly out this weekend, but O’Connell has said he will not allow them to remove the cars unless an arrangement can be reached for Caterham Sports Limited to continue (for the benefit of all creditors) – since 1MRT are in effect the company’s sole customer.

According to BBC Sport, F1 ring-master Bernie Ecclestone is trying to resolve the dispute and help Caterham F1 compete in the last 3 races of the season.

“We’re trying to help in any way we can, which we do with anybody that has run into a bit of difficulty,” said Ecclestone. “All I know is what I’ve been told. Not sure it’s all true either.”

BBC Sport said Ecclestone has discussed the situation with both sides (presumably Engavest and Fernandes) but says the matter is “.. a little too complicated to be able to say anything with any real knowledge.” He went on to say he would “rather not lose teams” from the grid.

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Oct 22, 2014  –