NOVEMBER 2, 2001
A crisis meeting at Prost
RUMORS are circulating in France that Prost Grand Prix is on the verge of filing for bankruptcy protection, although the stories have been denied by the team. The organization is to hold a meeting of all the staff on Friday after which it is expected more information will be available as to what is going to happen next.
The French financial newspaper Les Echos is reporting that Prost has only $52m in budget for the coming season and needs to pay $38m to Ferrari in advance for engines. The engine bill seems rather excessive given the generally accepted figure in the F1 paddock of around $25m so the reports should be treated with care.
The system in France is that a company can go into what is known as "redressement judiciare", which is similar to Chapter 11 bankruptcy. The company is then given a period of time to put together a plan to save the company. If this is not successful the court can decide to start selling off assets to pay the team's debts. This would create the possibility of someone coming in to buy the team's assets and starting a new team.
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