04/10/2014
NEWS STORY
The extent of Caterham's financial woes has at last been revealed as documents show that a court has ordered it to clear £750,000 in unpaid bills according to an article in the Independent by Christian Sylt.
Unfortunately that is just the start of this sad situation as although a court has ordered it to pay up it still hasn't done so. Remarkably, this hasn't happened once or twice but 34 times with the smallest unpaid bill coming to just £424. It would be a sorry state of affairs if you left a £424 bill unpaid let alone a Formula One team. More than anything else, this seems to show the scale of the problem at Caterham.
The team joined F1 in 2010 but hasn't scored a single point since. It has the worst track record of any outfit in the past 20 years and currently lies last in the standings. Three days ago it reached a new low when bailiffs raided its factory in Leafield to seize equipment it reportedly planned to use at tomorrow's Japanese Grand Prix.
In July Malaysian entrepreneur Tony Fernandes sold Caterham to a consortium of Swiss and Middle Eastern investors whose identities have not been disclosed. Since the sale there have been growing rumours about unpaid bills and they have now been confirmed.
Documents filed with the County Court Registry show 34 unsatisfied judgements against the team's operating company Caterham Sports. As can be seen from this list, they come to a total of £745,155 with the largest at £87,120 and the smallest at just £424. The judgements were all made after the change of ownership with the most recent being £46,164 on 26 September.
Anyone who is owed money can bring their case before a county court and if it rules that they should be paid then a judgement is made in their favour. However, this still doesn't guarantee that they will get their money and in those cases bailiffs are called in to seize assets which can be sold to pay the bills.
On Wednesday bailiffs revealed that they had seized equipment from a raid on Caterham's factory and published a list of goods they had taken. It includes a simulator, steering wheels and a 2013 test car.
Caterham issued a statement saying that it is proceeding as normal and "the race team is doing its preparation in Japan." It didn't refer to the seizure and instead said "there have been unfounded and unsubstantiated rumours concerning actions against 1MRT, the entrant and owner of CaterhamF1."
1MRT is a Malaysian company which owns Caterham Sports and provides it with management fees to run the F1 team. In turn 1MRT gets income from prize money and the team's sponsors including technology firms Dell and Intel.
The 2013 accounts for Caterham Sports are overdue but, as Pitpass revealed in April, those for the year-ending 31 December 2012 show that the team made a £4.8m net profit on revenue of £46.7m. In addition to receiving fees from 1MRT it was also fuelled with a £5.3m bank loan from Export-Import Bank of Malaysia which is secured on the company's assets including its factory.
Caterham Sports employs 276 staff and has creditors of £11.8m. Although it isn't clear who is owed money from the court judgements, some claimants have come forward.
In July 38 staff were dropped following a series of cost cuts by the new owners. They issued employment tribunal proceedings the following month but Caterham itself said it would take legal action against them for "gross misrepresentation of the facts" in their compensation claim. They weren't the only ones to go.
In September its team principal Christijan Albers resigned after just two months in charge. Italian Manfredi Ravetto took over Caterham's driving seat and last week told the official F1 website "I think we have done a small miracle to bring it to where it is." Clearly there is still a lot to do.