FRP Advisory, the administrators who handled the sale of Force India to Lawrence Stroll’s consortium last month, expect legal proceedings brought by a rival bidder to be “dismissed at the earliest opportunity”.
As RaceFans revealed earlier today Dmitry Mazepin’s company Uralkali is suing FRP in London’s High Court over the manner in which the administration was handled. Uralkali claims its bid was superior to the offer made by Strolls Racing Point company which was selected by FRP.In a statement issued to RaceFans, FRP criticised Uralkali for “choosing to issue their press release before issuing their claim” against them.
“We have acted in compliance with our duties as administrators at all times and oversaw a fair and transparent bidding process which ultimately achieved a very successful outcome for all stakeholders,” they stressed. “Having now seen the substance of Uralkali’s claim we are ever more confident it will be dismissed at the earliest opportunity.”
According to FRP, Uralkali failed to submit a “rescue proposal” for the team, unlike Stroll’s successful Racing Point bid.
“As all of the interested parties were aware, our primary statutory duty as administrators was to pursue a rescue of Force India as a going concern. All parties had the opportunity to submit a proposal to rescue the company rather than buy its assets.
“When the final offers came in, Racing Point was the only party to submit a rescue proposal. Once the proposal had been carefully assessed and we, alongside our legal advisors, were satisfied that it was reasonably achievable, we were under a statutory duty to proceed with it.
“Having failed to submit a proposal to rescue the company Uralkali now insists on comparing its bid to buy the assets of the company with a rival bid to rescue the company or buy the assets should that fail.”
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spoutnik (@spoutnik)
27th September 2018, 18:21
I guess it will all be done to the exact legal terms used to define such administrators role. If it is a rescue then I don’t see how Mazepin could win this.
Basil (@flyingbasil)
27th September 2018, 19:26
Technicaly the team was not saved, Stroll started a new legal entity and bought just the assets, most likely with a discount. Uralkaliy claims they could have kept force india on the grid.
anon
27th September 2018, 18:42
I might be missing something here, but whilst they say “Racing Point was the only party to submit a rescue proposal”, we also know from the article that Dieter produced (https://www.racefans.net/2018/08/21/mazepin-company-challenges-strolls-force-india-rescue-deal/) that the legal situation of the team meant that, in reality, it couldn’t be sold as a going concern.
Although Racing Point was offering a rescue proposal, the likelihood of that proposal being accepted seems to have been non-existent – as it was, the proposal wasn’t accepted and, rather than selling the team as a going concern, the administrator disposed of the assets via an asset sale.
If the administrator was aware that the business was unlikely to be sold as a going concern and would have to be disposed of via an asset sale, was the rescue plan therefore relevant when the circumstances meant it was not going to be acted upon?
It also seems to contradict the claims from Uralkali that they had put forward a five year development plan for the team, along with their funding plans for that proposal – that makes it sound as if Uralkali did have a rescue plan for the team, contrary to what the administrators have suggested.
Now, it may be that the administrators are correct and that the Uralkali bid didn’t have the same level of detail as Stroll’s bid, but something is not quite tallying up so far. We will see what happens if this case reaches the courts and more details are brought forth, but perhaps Dieter is right that, in the haste to seal a deal that kept the team on the grid, they have instead managed to create an even worse long term situation for the team.
bosyber (@bosyber)
27th September 2018, 20:50
Makes me wonder whether the Stroll party just had better UK lawyers, getting that ‘loophole’ in there. I think once the bid is accepted, with the seemingly good chance of rescue, it then cannot be easily renegotiated.
Neil (@neilosjames)
27th September 2018, 18:43
Wonder if Mazepin is desperate enough to get his angry, mediocre kid into F1 that he’ll decide to found a new team once all this has died down.
Not like he can’t afford it…
James Brickles (@brickles)
28th September 2018, 0:29
Makes me wonder why he doesn’t just set up his own team.
James Brickles (@brickles)
28th September 2018, 0:31
Helps if I actually read your whole post before replying! :P
anon
28th September 2018, 7:22
@neilosjames, as has been pointed out before, Mazepin currently fails the superlicence criteria – he can have as many teams as he likes, but his son will not be able to drive for any of them.
Shimks (@shimks)
28th September 2018, 10:38
I think the current process is unfair. People should be allowed to buy superlicence points with hard-earned cash.
Jere (@jerejj)
28th September 2018, 10:32
Move along, nothing to see here, folks.