RE: For sale: one F1 team
Discussion
As far as I know and simply .... if you buy the shares of the business, by default you also take on the debts and liabilities, including the people and everything associated with that business.
If you buy the assets off the business, then put those assets into a new business (which can include everything required such as branding, people, assets, pcs, IPR, cars etc etc etc) you leave the debts with the original company and move forward.
The proceeds from the sale of the assets and anything else they can sell, go to the creditors who are owes money.
It would be madness to buy the shares of a business with £12m debts, without a complete turnaround being possible and the sufficient funds to make it happen. Hence why I'm guessing their plan was always to buy the assets using a new business and leave the old business with the debts it accrued, but clearly wasn't the sellers idea.
Now both entities are in administration, the administrators will sell the business shares or the assets, to the highest bidder and at least it gives the potential buyer the chance to buy the cars etc and then go racing ... One without the other is worthless.
I feel for the creditors as by the time all the parties and administrators have collected their fees from it, there won't be a lot left for the people who are genuinely owed money.
It also depends on who actually appointed these particular administrators.
If the main creditor (the bank) had the right to appoint their own administrators, they'll be keen to maximise the money for whoever they appointed them.
Sounds like a bit of a mess, but if the current boss thought he could simply sell on the business and the debts along with it, his advisers must have been living on a different planet to everyone else.
If you buy the assets off the business, then put those assets into a new business (which can include everything required such as branding, people, assets, pcs, IPR, cars etc etc etc) you leave the debts with the original company and move forward.
The proceeds from the sale of the assets and anything else they can sell, go to the creditors who are owes money.
It would be madness to buy the shares of a business with £12m debts, without a complete turnaround being possible and the sufficient funds to make it happen. Hence why I'm guessing their plan was always to buy the assets using a new business and leave the old business with the debts it accrued, but clearly wasn't the sellers idea.
Now both entities are in administration, the administrators will sell the business shares or the assets, to the highest bidder and at least it gives the potential buyer the chance to buy the cars etc and then go racing ... One without the other is worthless.
I feel for the creditors as by the time all the parties and administrators have collected their fees from it, there won't be a lot left for the people who are genuinely owed money.
It also depends on who actually appointed these particular administrators.
If the main creditor (the bank) had the right to appoint their own administrators, they'll be keen to maximise the money for whoever they appointed them.
Sounds like a bit of a mess, but if the current boss thought he could simply sell on the business and the debts along with it, his advisers must have been living on a different planet to everyone else.
The Insolvency Act is a weird and wonderful thing - things don't often happen how you'd expect, but it's fairly simple how the basic process of an administration works. Im not an Insolvency Practitioner, but I have been through the process...:
- A company can either go into voluntary administration (which should really be what happens once the directors realise the game is up - a secured creditor would normally make the appointment - often the bank or a finance house) or a court can appoint administrators as the result of a petition from a creditor. Directors will usually enter voluntary administration as they are potentially personally liable for any debts incurred through mis-trading.
- Once appointed the administrator will usually sack the directors and assume control. Shareholders essentially disappear and become irrelevant. He will make an assessment as to whether the business can be sold as a 'going concern'.
- He has ONE obligation - and only one: He is *personally* legally obliged to realise the maximum value from the business assets for the creditors. He has NO OTHER obligations or duties to shareholders/customers etc etc. If he doesn't do this one thing in an effective manner he could be *personally* liable.
- The administrator splits the business from its debts. The business itself then has no further obligation to the creditors - this obligation has passed to the administrator. The business is the assets the administrator holds to realise value for the creditors.
- If 'going concern' looks possible, bids will be invited for the *business* (NOT the company). Key point: it's the assets/goodwill/(some?) employees that are being bought (debt is left behind in the company). Time is of the essence as goodwill is normally eroding fast at this point.
- If not a going concern the administrator will simply sell the assets piecemeal to realise the highest possible value. Again generally as fast as possible to minimise associated costs. Eventually all assets are gone leaving a pot of cash and the creditors in the company.
- The company is then liquidated and cash is allocated in the following order:
- Administrator Fees
- Secured Creditors (normally the bank, finance house or other lender)
- If anything's left: unsecured creditors including employees and HMRC on a pro-rata basis (ie. 'x pence in the pound')
- In the very unlikely event of anything being left after that and creditors have received everything owed, then the Shareholders get the rest - but this might indicate the company wasn't bust in the first place (or some incredible accretion in value occurred in the company's assets but which still precluded a going concern sale)
It's worth noting that employees make a separate claim to the government and thus have some insurance over monies to them.
Hope that makes sense. Key thing is to separate the notion of 'business' from the 'company' (the latter of which is merely a vessel to hold the creditors once the assets are sold). The company will always likely be wound up whatever the outcome once the administration procedure is kicked off.
- A company can either go into voluntary administration (which should really be what happens once the directors realise the game is up - a secured creditor would normally make the appointment - often the bank or a finance house) or a court can appoint administrators as the result of a petition from a creditor. Directors will usually enter voluntary administration as they are potentially personally liable for any debts incurred through mis-trading.
- Once appointed the administrator will usually sack the directors and assume control. Shareholders essentially disappear and become irrelevant. He will make an assessment as to whether the business can be sold as a 'going concern'.
- He has ONE obligation - and only one: He is *personally* legally obliged to realise the maximum value from the business assets for the creditors. He has NO OTHER obligations or duties to shareholders/customers etc etc. If he doesn't do this one thing in an effective manner he could be *personally* liable.
- The administrator splits the business from its debts. The business itself then has no further obligation to the creditors - this obligation has passed to the administrator. The business is the assets the administrator holds to realise value for the creditors.
- If 'going concern' looks possible, bids will be invited for the *business* (NOT the company). Key point: it's the assets/goodwill/(some?) employees that are being bought (debt is left behind in the company). Time is of the essence as goodwill is normally eroding fast at this point.
- If not a going concern the administrator will simply sell the assets piecemeal to realise the highest possible value. Again generally as fast as possible to minimise associated costs. Eventually all assets are gone leaving a pot of cash and the creditors in the company.
- The company is then liquidated and cash is allocated in the following order:
- Administrator Fees
- Secured Creditors (normally the bank, finance house or other lender)
- If anything's left: unsecured creditors including employees and HMRC on a pro-rata basis (ie. 'x pence in the pound')
- In the very unlikely event of anything being left after that and creditors have received everything owed, then the Shareholders get the rest - but this might indicate the company wasn't bust in the first place (or some incredible accretion in value occurred in the company's assets but which still precluded a going concern sale)
It's worth noting that employees make a separate claim to the government and thus have some insurance over monies to them.
Hope that makes sense. Key thing is to separate the notion of 'business' from the 'company' (the latter of which is merely a vessel to hold the creditors once the assets are sold). The company will always likely be wound up whatever the outcome once the administration procedure is kicked off.
Crafty_ said:
I'm no football expert, but if that happens Fernandes will probably run up a bit of debt and sell it to the first scumbag that comes along.
From comments here and there is seems very unpopular with the fans but I don't really follow football, so I don't know if I'm seeing an unrepresentative picture.
I can't stand football, so I don't really follow what goes on in that world, but isn't one of Fernandes' co-directors at QPR a certain Mr Bernard Ecclestone?From comments here and there is seems very unpopular with the fans but I don't really follow football, so I don't know if I'm seeing an unrepresentative picture.
Plenty of cases in the past where f1 teams have disappeared. Their cars get sold off, and eventually get used as track days toys. Rent an f1 car for xxx per day, and so on.
Lets remember though, that Williams are a privateer company, so it IS possible to run it profitably. But sadly, I think paying drivers are part and parcel of this.
There would also be a slice of revenue from the overall show, from the commercial rights holder (bernie). Not to mentioned whatever else the teams can generate (merchandising, hospitality, etc etc).
Hard game though, with lots of zeros in surprising places.
Lets remember though, that Williams are a privateer company, so it IS possible to run it profitably. But sadly, I think paying drivers are part and parcel of this.
There would also be a slice of revenue from the overall show, from the commercial rights holder (bernie). Not to mentioned whatever else the teams can generate (merchandising, hospitality, etc etc).
Hard game though, with lots of zeros in surprising places.
Crafty_ said:
Bernie and Flavio Briatore used to joint own QPR, I believe Fernandes bought the team from them and he is sole owner.
Dear God, they've had Bernie, Fernandes AND Briatore (who's dodgier in one fingertip than the other two put together - the creepiest slimeball ever!) as owners? Poor b
ds!Someone could try a buy one get one free offer?
http://www.bbc.co.uk/news/uk-england-oxfordshire-2...
http://www.bbc.co.uk/news/uk-england-oxfordshire-2...
mike parfitt said:
soxboy said:
I'll try something that wastes less money, like burning £50 notes surrounded by coke and hookers.
So just like formula one in the 90's thenecsrobin said:
So that's 2 teams out for the foreseeable future. What about the other back running teams, Do we know their financial situations?
Sauber looks to be on the edge, Lotus has had all number of shenanigans with it's "ownership" and Force India has an owner who has his own financial troubles....ivanhoew said:
so , just to check if i have this right,
this situation of the team being up for sale depends on ,
a) fernadez being reliable and passing over the shares.
b)kolles being reliable and passing over the ownership papers .
um,is it just me, but...
Thankfully the question of who owns the shares now falls away - the administrators now have the legal power to sell the companies' assets, regardless of the wishes of who actually owns the company itself. The bad news is that the most comfort you will get is "The Administrators sell with such title as the administrators have...", so you'll need to do a load of due diligence to make sure they're not on HP or charged to some third partythis situation of the team being up for sale depends on ,
a) fernadez being reliable and passing over the shares.
b)kolles being reliable and passing over the ownership papers .
um,is it just me, but...
Toys out of the pram on QPR : http://www.pitpass.com/52790/Fernandes-threatens-t...
He's still lying too,
Anyone trusting him is a complete fool.
He's still lying too,
Fernandes said:
In our four years of owning Caterham we paid our debts in full, did our best, built a team. We decided to focus on QPR.
Uh huh. So how come he asked Engavest to pay off the debt that the team already had as part of the purchase agreement ?Anyone trusting him is a complete fool.
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