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Reporters – 27/01/2019

It collapsed in 2014, but so far the staff of the Caterham team have gone unpaid for work. So why did it take so long for the administrators to pay off the debts?

Caterham employees paid by administrators

More than two hundred former employees of the Caterham team have finally been paid a small sum, following a legal row which has finally been resolved five years after the team collapsed.

The Malaysian owned team fell into administration at the end of the 2014 season following a dispute between the founder Tony Fernandes and a group of investors who had bought the team that summer.

The administrators Smith & Williams took control of the team ahead of the United States Grand Prix, and missed the race along with Brazil, but a crowdfunding campaign allowed the team to race in Abu Dhabi while efforts to try to find a buyer continued.

The attempts to find a buyer failed with the teams assets being sold at the beginning of 2015. several members of staff went on to secure jobs at other F1 teams or elsewhere in motorsport, Caterham’s assets were sold at auction before the start of the campaign.

Motorsport.com has learned that earlier this month, Smith & Williams was able to pay 216 employees that were transferred to their control under TUPE regulations from Caterham.

A statement from the administrators, Finbarr O’Connell, Henry Shinners and Mark Ford, described the recent payment, made on January 15, to those employees as “good news”.

They said “[It] reflects the years of work performed by the administrators in unwinding the complex affairs of the Caterham Formula 1 companies.”

The administrators said that many of the assets they were responsible for converting had “international aspects and were subject to competing claims that had to be resolved before being realised”.

They say that the last assets and tax affiars have been completed, meaning that fund were available to make payments. It was reported last year that £217,495.06 worth of claims have been made by the teams former employees.

They state that “preferential creditors are entitled to receive the equivalent of unpaid wages for the previous four months up to a maximum of £800 total”, plus holiday pay of up to six weeks and “some occupational pension payments”.

The payments have been made after tax and National Insurance was paid to the British tax office, HMRC.

Unsecured creditors include the companies who have sought outstanding payments from Caterham, which administrators said last October, in their latest progress report, comprised 25 creditors claiming £66.8million.

according to the administrators “there remains a good prospect for a small dividend for unsecured creditors and we anticipate that such payment will be made in the next six months”, after which the case will be concluded.

 

Britain will leave the EU in sixty-one days, as parliament rejected the government’s deal last week teams and the UK governing body began discussing what impact a no deal Brexit could have on F1. So how important is the deal to F1?

Brexit – Teams write to May about the impact of no deal

Three UK based teams and the national governing body have discussed writing to the British prime minister Theresa May about their concerns about a possible no deal Brexit.

The head of the national body Motorsport UK, David Richards has been lobbying the government over the departure of the UK from the European Union and spoke with three of the teams last week. The deal negotiated by Mrs May and the government was rejected by MPs earlier last week by 230 votes, the largest defeat suffered by a government in the House of Commons since the First World War.

The teams and UK nationals could face delays travelling to and from the European races this season if no deal is reached on customs, travel and cross border trade. Mrs May will set out her Plan B later on Monday.

Prior to the vote, the teams shared their concerns and agreed that a no deal Brexit needs to be agreed. They also agreed to not to name themselves but speak as one voice, however, it is believed to include one of the biggest teams.

They agreed that they wouldn’t take a pro-Brexit or anti-Brexit position, however, agreed that a no deal Brexit needs to be avoided. While no action has yet been taken, the teams believe that speaking collectively would be stronger than raising concerns individually.

They are worried about the impact a no-deal Brexit would have on their ability to move goods and people across borders in Europe. The other concerns include hiring staff from EU countries, particularly in manufacturing, as well as the cost of importing and exporting goods.

Richards warned last weekend that one outcome could be teams having “satellite operations” in Europe. Richards at last week’s Autosport International Show, “Something we should be so proud of is the top F1 teams and world champions based here.”

The impact of Brexit will likely extend beyond the teams to suppliers who import and export to the EU, as well as drivers, fans, team personnel and the media.

 

In a bid to increase overtaking and create better racing this year, a number of changes were made after the failure in 2017 to create close racing. But how much is the simplifying of aerodynamics costing the teams?

2019 changes cost £13m

Red Bull’s advisor Dr Helmut Marko says that the rule changes for 2019 have already cost the team £13 million. In a bid to increase overtaking this year, the regulations have been tweaked to allow cars to run closer together and create better racing.

The Anglo-Austrian team were against the changes because of the lack of reliable data to support it and the financial impact it would have.  Marko believes that while the front wing would improve F1’s overtaking prospects, despite performance level “already at the standard” of mid-2018, “we are €15million poorer”.

He told Motorsport.com, “We have the same [aerodynamic] data as last summer. By the time we get to Melbourne, we’ll probably be better than that. [But] there is now a good basis for discussion between Mercedes, Ferrari and us.

“We agree that regulations must not be determined by technicians. As soon as technicians are involved, the costs increase and everything becomes complicated. Things have to be specified.”

Marko says that Mercedes was behind the changes, despite their dominance of the sport for the last five years. Red Bull do have their frustrations over the changes, but he says the political alliance between the top teams were stronger than before.

As well as a good relationship with Mercedes, Marko claimed that “a lot of sympathy” developed between Red Bull and Ferrari following the death of president and CEO Sergio Marchionne last summer.

2019 could be the year where the political and regulatory debate could be as interesting as the on-track action, as the teams, Liberty Media and the FIA try to negotiate the next Concorde Agreement, engine, technical and sporting regulations all before the 31st December 2020 deadline.

 

And that’s all from Reporters for this week, goodbye

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Jack Fielding
Jack is responsible for the day-to-day running of Formula One Vault. He brings you all the brilliant content. Has an obsession with all things Formula One and anything with an engine.

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