AUGUST 26, 2002
Arrows to miss Belgium
The Arrows team will not be in Spa-Francorchamps this weekend - although the news has yet to made official. But, amazingly, this does not mean that the team is yet dead. The current impasse in negotiation is the same as it was in Hungary and it seems that the powers-that-be in F1 are happy to accept Arrows's claim of "force majeure". This means that there has to be some argument other than a lack of finance. One must assume that Tom Walkinshaw's mention of legal advice is the answer. Our sources suggest that Arrows cannot compete in Belgium because the payment of the Cosworth engine bill would mean that one creditor was being favoured over others and that could lead to legal implications if the team is declared to be insolvent - which seems now to be inevitable.
The talks involving a takeover of the team by Craig Pollock appear to have stalled because Morgan Grenfell is not willing to write off its entire investment in the team and the investment fund can afford to wait until a court decides whether or not Arrows owes the investment fund $100m. As long as that law suit remains it is hard to see how anyone is going to buy the team without knowing how much debt is involved. The findings of the court could also create serious legal problems for some of those involved.
At the same time a compulsory winding-up order is edging ever closer and it is hard to see how the team will be able to avoid this. In fact this could turn out to be useful for Arrows as it will, in effect, wipe out the need for the Morgan Grenfell case and thus the potential implications of it.
The winding up of the team is likely to happen on September 10. The team would then be placed in receivership. This would create the opportunity for other buyers to go in and buy up Arrows assets and thus create a new team based on the rights and equipment of the existing operation. This manoeuvre was tried in March to save Prost Grand Prix but failed because of procedural errors.
If this was done successfully the ownership of the team could be transferred before the Italian GP and the new owners could claim "force majeure" at Monza as there will not be enough time to get all the equipment down to Monza in time for the race. The new owners would then get a few more days to get things ready for an appearance at Indianapolis.
The big question is who might be planning such a bid: Pollock has to be seen as one potential buyer, Dietrich Mateschitz is another as he would have to pay considerably less to buy the wreck of Arrows than he would if he tried to do a deal with the Ford Motor Company.
The other possibility is that Walkinshaw might even try to buy the team himself.
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