Lotus F1 team given week to seal Renault deal
The Lotus Formula One team were given a week to seal a deal with Renault or go into administration on Friday after a judge agreed to a final adjournment of a case brought against them by Britain`s tax authorities.
London: The Lotus Formula One team were given a week to seal a deal with Renault or go into administration on Friday after a judge agreed to a final adjournment of a case brought against them by Britain`s tax authorities.
Lawyers for British-based Lotus had sought more time on the basis that a deal with Renault was imminent whereas administration would leave creditors worse off with the team likely to cease trading.
Mr Justice Birss said he was satisfied a deal could be done and scheduled the next hearing for Sept. 28, the day after the British-based team competes in the Japanese Grand Prix at Suzuka.
"It is to be regarded as a final adjournment," the judge, who agreed to delay the start of his holidays for the sake of continuity, told the hearing at the Chancery Division of the London High Court.
Lawyers for the revenue and customs authority (HMRC) opposed the request for adjournment on the grounds that debts were mounting and the team had shown no willingness to pay them despite meeting other obligations.
Luxembourg-based owners Genii are covering the costs of keeping the team, who are racing in Singapore this weekend, on track but have faced a series of legal challenges from creditors.
Bailiffs impounded the cars after last month`s Belgian Grand Prix in a dispute with former reserve driver Charles Pic that was subsequently settled.
The court heard that 905,000 pounds ($1.42 million) of income tax and national insurance contributions fall due to HMRC on Sept 22, with similar amounts unpaid in July and August.
"The people they need to pay have been paid. They are taking advantage of the involuntary credit to HMRC," barrister Jeremy Bamford told the court.
Referring to regular reassurances that Renault were poised to step in, he said the team`s existing shareholders had nonetheless "not been willing to put their money where their mouth is.
"The concern for HMRC is that the negotiations have been going on for some time and we keep on getting assurances that the deal is nearly done," he added.
With confidential documents passed to the judge to show how close a deal was, lawyers for Lotus said matters had progressed "substantially" since the last adjournment 11 days previously.
They said a letter of intent had been signed by main shareholder and team principal Gerard Lopez with Renault expected to sign shortly.
The court heard that West Oxfordshire District Council, in whose area the 400-strong team has its Enstone factory, were owed 483,000 pounds but had submitted a letter supporting the request for adjournment.
Lotus said a substantial payment was due from Venezuelan oil company PDVSA on Nov 1, with that sponsorship set to continue into 2016 after issues with Renault were resolved, but warned that would not be forthcoming if the team went into administration.
Finbarr O`Connell, the administrator who led the now-defunct Caterham team at the end of the 2015 season and then oversaw the disposal of their assets, was among observers at the hearing.