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Force India F1 team set for High Court legal dispute with administrator

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Formula One, the world’s premier motorsport championship looks likely to be plunged into a legal battle soon after a prospective buyer of the Force India F1 team considers suing administrators over “serious concerns about the conduct of the bid process.”

Russian company Uralkali, made a serious bid to buy the team after Force India fell into administration in this summer. The team had been owned by charismatic Indian entrepreneur Vijay Mallya, Dutch businessman Michiel Mol and Indian conglomerate Sahara. Mallya, who is currently the subject of extradition proceedings by the Indian Government to force his return to the UK from India, was worth an estimated $1.5 billion at his peak in 2010, but his fortunes have declined significantly since then. The Uralkali bid ultimately failed, with the administartors agreeing a sale of the mid-table team to a consortium led by Lawrence Stroll, father of Williams F1 driver Lance.

Following the adminsitrators decision, Uralkali has indicated that it has launched legal action in London's High Court. In a statement given to Autosport magazine, Uralkali cites "inadequate responses" to questions regarding their bid from the administrators, Geoff Rowley and Jason Baker of FRP Advisory LLP. Uralkali claims that the administrator has confirmed that the winning bid was "significantly inferior" to its own and Uralkali believes "the highest bid should have been determined as the winner" and that the administration process contained "misrepresentations and lack of transparency" and "failed to achieve the maximisation of sale proceeds for the benefit of creditors, shareholders and other stakeholders".

It says it made what it calls "an extremely generous offer to acquire the company's business, assets and goodwill", including a cash consideration of between £101.5million and £122million.Uralkali says its proposal and offer fell on deaf ears:

Following the submission of our proposal, the administrator refused to engage with Uralkali team, did not reply to phone calls and emails and communicated with Uralkali in a single email following close of business on August 7, 2018 that it had entered into an exclusivity arrangement with another bidder regarding a proposal to rescue the company. “Despite expiration of the deadline set by the Administrator, no rescue plan was submitted to the court for approval, which confirmed Uralkali’s view that the rescue option was not achievable in the timeline and under conditions proposed by the Administrator. Under these circumstances, it is surprising that no attempt was made by the Administrator to engage with Uralkali with respects to its bid for the assets and business of Force India.”

Replying to the news of the High Court action, administrators FRP told Autosport that all bidders for the team were treated the same. “All bidders were given equal opportunity to submit the best deal for Force India…“throughout, we (the Joint Administrators) have closely followed our statutory duties and objectives as administrators and had the advice of experienced legal counsel.”

If you are thinking about suing another company but are worried about the costs of resolving the dispute or going to court, Advantage Litigation Services can help. We have vast experience navigating the different ways of funding commercial dispute resolution and are best placed to help you identify the most appropriate funding option and litigation protection that will best benefit you and your business. Click here to contact us or call 0800 160 1298 to discuss how we can help you manage the risks and find a funding option that works for you.

 

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