NOVEMBER 20, 2002
What is Behring talking about?
The biggest flaws in his argument is over the involvement of former Arrows partner Morgan Grenfell Private Equity which Behring says is now out of the picture. Obviously he does not read the newspapers. A day before Behring made his remarks there was a court case in the High Court in London in which it was made very clear that the battle between Tom Walkinshaw and Morgan Grenfell Private Equity is very definitely solved yet and the case will come up before Justice Gavin Lightman on December 9 in London. Only then will it be clear whether or not Morgan Grenfell is out of the picture. If there was not a problem the case would have been cancelled by now.
There is also the question of an entry for 2003. The FIA refuses to make any comment about what is going on with the entry for next year but Arrows has let it be known that it put in an entry. This does not guarantee anything as the FIA does not have to accept the entry. The team's application for administration effectively puts the team into a state of insolvency (legally-speaking at least) although this can be cancelled if at the last minute Arrows withdraw the adminstration petition. If that happens the team still has to face a winding-up petition from the creditors who wish to be paid. When it comes to considering the Arrows entry the FIA will presumably take into account the team's financial status.
As we understand it the majority of the F1 teams have already indicated that they do not believe Arrows has any rights to an entry next year and so the problem of an entry cannot be overcome by everyone agreeing to turn a blind eye to the problems. Behring says that he has been told that there is an agreement in place for the team to get an entry. The FIA refuses to comment on whether or not this is true and says only that Arrows's position will become clear when the entry list is published on December 1.
If money has already changed hands Behring may find himself in a very unfortunate situation on December 1 as he will have paid for the purchase of the team with a loan of $50m, based on the belief that Arab investors will come up with the money to pay for the purchase. If there is no entry it is unlikely that the Arabs are going to pay and Behring will find himself owning something of no value and will have a bill of $50m.
One must presume that he has done the necessary due dilligence on the deal. If he has not then he only has himself to blame.