Force India creditors already paid by Stroll

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Force India creditors already paid by Stroll
By: Adam Cooper
Oct 16, 2018, 2:04 PM

Force India has nearly completed the task of paying off the creditors of the original team after a highly unusual move by new owner Lawrence Stroll.

Stroll and his associates paid £90m for the assets of the old team before creating a new company and lodging a new entry with the FIA, under the Racing Point name.

As the original company is under administration, usually that £90m would be locked into a legal process that could take months or even years before the funds are divided up and used to pay the creditors, led by Mercedes and Sergio Perez.

As that figure is more than enough to pay the creditors, all are guaranteed to receive the full amount owed.

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However, Stroll took the unusual step of taking over those debts himself and ensuring that the creditors were paid immediately, rather than having to wait for the legal process to unfold. When that process is finally completed, Stroll will get his money back.

"It's important to note that the current shareholders have taken all the risk for the creditors," team principal Otmar Szafnauer told Motorsport.com. "And have put it in extra money such that the creditors can be paid off immediately, and not at some future date, post-administration. That can take one or two years sometimes.

"Lawrence wanted to do what's right by the suppliers that have supported us, and a lot of them are industry suppliers who don't just supply us, but other teams in the paddock.

"And he thought it was right to take care of those people, by guaranteeing that they get 100% of their debt, and in a timely fashion."

Szafnauer suggested that the process of paying the creditors could be completed this week, just two months after the sale to Stroll.

"We're going through all of them, just as they come up, so probably 100% or if not 95% of them will be paid by the middle of October.

"That's not usually what happens in administration, and it's something that we should take note of, and also thank the new shareholders for – not me thanking them, but all the creditors getting paid off early. It takes that worry completely away.

"He'll get it back when the creditors are paid by the administrator, whenever that is."

Szafnauer has been impressed by Stroll's straightforward approach to business.

"He's definitely a motivator and he's a clear and direct talker, so you get good direction. He's got high expectations, which is fine by me. I grew up in a society in the States where people had expectations when they're laying out a bunch of cash.

"I'm happy the expectations are there. We worked hard to make sure we deliver upon those expectations. The nice thing about Lawrence is he tells you exactly what he's thinking, and he's straightforward about it.

"The nice thing is that you can have a debate with him, and he'll listen, and you'll come to a conclusion. But once a decision's made, then you've got to get on with it."

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About this article

Series Formula 1
Teams Force India
Author Adam Cooper
Article type Breaking news