A couple of weeks ago, news about a legal issue with the Lotus F1 Team hit the press. A collection of creditors to which the team owed money filed a petition to receive payment. Among these companies was Xtrac, a transmission technology company which provides transmission components to Lotus. The case went to a hearing on July 6, where the judge postponed the next hearing until July 20 to allow the team to settle with the creditor outside of court. More details about this issue can be found here.
The second hearing has been held and it was determined that the Lotus F1 Team had been able to work out a settlement outside of court with the lead creditor, Xtrac. “Only one creditor can take control of a petition at any one time, and that creditor has been paid,” Lotus CEO, Matthew Carter, confirmed with Autosport. “The court now just needs to make sure no other creditors are going to step forward, and that’s where we are.”
It is possible that Lotus could face another round of lawsuits, as another creditor could potentially take the lead. Despite this, Carter is confident that the team is safe for the time being: “Because there is a recess for summer, I don’t think anything will go before a judge until September-October time, which is what we always knew was going to happen anyway.” As was stated when the legal troubles were first announced: Lotus could be a risk of entering administration.
There are reportedly multiple lawsuits pending against the team for owed funds. Some of these claims are estimated to be close to £30,000. “It’s not great at all, but it’s part of the process,” Carter added. “I guess that’s where Formula 1 is at the moment. It’s difficult. Hopefully we can just concentrate on the racing, as opposed to anything else.” Lotus’ struggle with funding hasn’t been a secret and we had to have known that this would occur sooner or later.
On a positive note, this business relationship has not been severed by the legal battle. “Xtrac and Lotus F1 have taken key steps to resolve the matter out of court. We look forward to continuing a positive working relationship with Lotus F1,” a spokesman from Xtrac told Racing Clothesline. This is all of the details that the company will provide at the current time.
These issues with the Lotus F1 Team have showed us how much the current Formula One economy is suffering. Lotus is just one of the many teams that reported to have a small budget: Sauber and Force India being included also. With one of these teams already suffering, the paddock is in fear of which team will be the next to be placed under the gavel of the courts.
