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22/07/2015 LotusFormulaOneTeamChasedForNearly$1MillionOfUnpaidBillsForbes

http://www.forbes.com/sites/csylt/2015/07/19/lotusformulaoneteamchasedfornearly1millionofunpaidbills/ 1/6

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LotusFormulaOneTeamChasedForNearly$1MillionOfUnpaidBills

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TheLotusFormulaOneteamhasracedintoastormafteraBritishcourtorderedittoclearnearly$1millionofunpaidbillswriteChristianSyltandAaronRook.

ThenewsisrevealedinBritainsSundayExpressnewspaperanditfollowstherecentdiscoverythatLotusisatriskofclosureaftercreditorsfiledwhatisknownasawindinguppetitionagainstit.Anyoneowedmorethan$1,170(750)canapplytoacourttowindupacompanywhichiswhatLotusfacedinLondonsHighCourton6thJuly.Thejudge,MrRegistrarBriggs,adjournedthehearingfortwoweeksinordertoallowtheteamtimetofindaresolutiontothematter.Therearemorethanafewoverduepayments.

DocumentsfromBritainsCountyCourtRegistryshowthatLotushasbeenorderedtoclear27unpaidbillswhichcometo$876,049withthefirstdemandforpaymentdatingbackto19Mayandthemostrecent,for$2,451,from10July.Thelargestofthebillscomesto$207,240andthesmallestisjust$151.TherulingstoclearthebillsareknownasCountyCourtJudgements.Anyoneowedmoneycanbringtheircasebeforeacountycourtandifitrulestheyshouldbepaid,ajudgementismadeintheirfavor.However,thisdoesnotguaranteetheywillgettheirmoneyandthecourtrecordsshowthatLotushassatisfiedjustfourjudgementscomingtoatotalof$98,400.

ThereisnosuggestionthatLotuswillcloseitsdoors.Infact,itisfarfromthefirsttimethatfinancialtroubleattheteamhascometolight.

AsForbesreportedlastyear,in2013Lotusmadea$107.9millionnetlosswhichisbelievedtobethebiggestevermadebyanautoracingoutfit.Thelosswasfuelledbytheteamshugecostsandacceleratinginterestpaymentsonintercompanyloans.Itwasdisclosedintheteamsfinancialstatementsfortheyearending31December2013whichshowedthatnetlosseswidenedby$16millionasrevenueremainedstableat$154.1million.Costswerecutby$5millionbutinterestpaymentsontheintercompanyloansincreasedfrom$1millionto$22.6million.

LotusF1isbasedinBritainandisultimatelycontrolledbyprivateequityfirmGeniiCapitalwhichwasfoundedbyGerardLopez,anearlyinvestorinSkype.

In2009Geniiinitiallyinvestedintheteam,whichwasknownasRenaultF1andwontwodriversandconstructorsworldchampionshipsin2005and2006withFernandoAlonso.

TheFrenchteamsuccessfullybroughttoanendfiveyearsofFerrariandMichaelSchumacherdominanceinthesport.Alonsohowever,themaincatalystinRenaultssuccess,lefttheteamin2007forMcLarenbutafterastrenuousseasonwiththeWokingteamhereturnedtoRenaultin2008.

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Christian Sylt , CONTRIBUTORI write about the business of auto racing and theme parks

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22/07/2015 LotusFormulaOneTeamChasedForNearly$1MillionOfUnpaidBillsForbes

http://www.forbes.com/sites/csylt/2015/07/19/lotusformulaoneteamchasedfornearly1millionofunpaidbills/ 2/6

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Theteamhoweverwasonasteadydecline,finishingaslowaseighthin2009.ItstimeinF1thoughwillalwaysbedefinedbyonecontroversialincidentbilledascrashgate.

Thescandal,orchestratedfromtheRenaultpitwall,sawtheteamordertherecentlycrownedFormulaEworldchampionNelsonPiquetJrtocrashattheSingaporeGrandPrixin2008allowinghisteammateAlonsotogainanadvantageunderthesafetycar.

ArguablythescandalwasthebeginningoftheendforRenaultandin2010GeniitookcompletecontroloftheteamwhichallowedRenaulttoscalebackitsinvolvementtobeingonlyanenginesupplier.ItwasrebrandedasLotusRenaultGPfor2011followingatitlesponsorshipsignedwiththehistoricBritishmotormarqueLotusCars.In2012itbecameLotusF1Teamanditsprospectsrevvedup.

Thenewlybrandedteamenjoyedreasonablesuccess,securingtwowinsattheAbuDhabiGrandPrixin2012andtheAustralianGrandPrixin2013,bothofwhichwerethankstoformerchampionKimiRaikkonen.

However,financialdifficultiesbegantoburdentheteamandattheendof2013RikknenleftforFerrariafteradisputewhenheclaimedhehadnotbeenpaidasingleeuroallyear.LotusnowhasalowerprofiledriverpairingofRomainGrosjeanandPastorMaldonado,whoisbackedbyVenezuelanownedoilcompanyPDVSA.

ItisthelatestteamtoskidintotroubleafterCaterhamandMarussiacrashedintoadministration,theBritishequivalentofChapter11bankruptcy,inOctoberlastyear.TheycollapsedunderthecolossalcostsrequiredtorunF1teams.

Generally,thedirectorsofF1teamsrunthemtobreakeven(meaningthattheymakeneitheraprofitnorloss)whichinvolvesspendingwhateverisavailabletothem.Theydothisinpursuitofvictoryonthepremisethatitisbettertowinandmakenoprofitratherthanmakemoneyanddobadlyontrack.

Victoryontrackincreasesthevalueoftheteamwhichgivestheownersapayoutwhentheycometosellit.Italsoincreasestheteamsabilitytobringinmoremoneyfromsponsorshipsincebrandsarepreparedtopaymoretobeassociatedwithawinningteam.Whilstteamownerscangetafinancialreturnfromsellingateaminthelongrun,whatdotheygetoutwhenitisrunningtobreakeven?

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RacetogetmoneyoutofailingLotusFormulaOneaftercourtorderTHELotusFormulaOneteamhasbeenorderedbythecourtstoclearnearly600,000ofdebts,afterfailingtopay27bills,oneofwhichwasforjust97.

RomanGrosjean'sLotusbehindRedBullinCanadalastmonth

Thisyear,accordingtocourtdocuments,27"unsatisfiedjudgments"worth561,408inall,havebeenmadeagainstLotus.

Thelargestofthesewas132,816andthesmallestwasthedemandfor97.ThemostrecentwasonJuly10for1,571.

CountycourtrecordsalsoshowthatLotus,basedinPrimeMinisterDavidCameron'sconstituencyofWitney,Oxfordshire,hassatisfiedjustfourjudgmentscomingtoatotalof63,063.Earlierthismonth,itwashitwithaHighCourtwindinguppetitionfromacreditor.

MrRegistrarBriggsadjournedthehearingfortwoweekstoallowtheteamtimetofindaresolution.

LotusisthelatestF1teamtohittroubleafterCaterhamandMarussiacrashedintoadministrationinOctober.

Accountsshowthatin2013,LotusF1madea64.9millionnetlossonrevenuesof92.7million.

LotusF1,acquiredfromRenaultin2009,iscontrolledbyprivateequityfirmGeniiCapital,notthesportscarmakerinNorfolk.

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The Independent - 21 Jul 15 - Cheglakovi - 21 Jul 15 - CheglakovLotus Formula One Team Chased For Nearly $1 Million Of Unpaid Bills - ForbesLotus Formula One team ordered to clear 600k of debts after failing to pay its bills _ City & Business _ Finance _ Daily Express