Follow thejudge13: Why not follow thejudge13 by email. Click on the button at the top right of the page to receive an email when (and only when) a new article hits the interweb.
I have now put 2 RSS feeds at the bottom of the right hand bar for those of you who know how to use them for updates.
There are times in life when the weight of issues bombarding you must make you sit up and think – some of this must be my own doing. Ecclestone is currently the subject of a writ from Bluewaters in the US courts who claim he discriminated against their offer to buy F1 at the time CVC acquired the commercial rights shares.
CVC had given Ecclestone a guarantee he would continue as CEO of FOM (the operating company that negotiates all commercial deals for the sport). Bluewaters had offered more money for the shares but categorically stated they would not give Mr. E the role of CEO because they had someone else in mind they felt would be better to managing their interests.
This has now lead to those who held the shares at the time taking action against Ecclestone for not representing their best interests and not selling the shares to the highest bidder. Constantin Medien, a former part owner of F1, has petitioned the High Court in London with a claim that Mr Ecclestone and Mr Gribkowsky conspired to undervalue F1 when it was sold to CVC in 2006 for $1.7bn. The case is scheduled for October this year.
Ecclestone comments in The telegraph, “I’m prepared to give evidence in court and there will be a few others [who do so] as well. I wish they would bring it forward. It’s going to be amusing.” This is a common flippant attitude Mr. E displays toward anyone who challenges his views and authority.
Prosecutors in Germany have already ruled that the $44m paid to Mr Gribkowsky (the decision maker at Bayern LB, the German bank holding a significant shareholding in F1) was a bribe which meant he would wave through the sale of F1’s commercial rights to CVC. Mr. Gribkowsky is now serving an 8 year sentence for his part in the fraud.
F1’s Mr. Big has not yet been charged with any wrongdoing in Germany, though the Munich prosecutors of his ‘partner in crime’ – Gribkowsky – are at present examining the case and intend to press charges when they have had access to all documentation requested from Ecclestone.
However, this is taking time and both Bluewaters and Constantin Medien have now filed a civil suit against Ecclestone both in the US and the UK. Constantin Median claim they lost out as BayernLB’s stake alone was worth $2.8bn but Mr Gribkowsky did not investigate other bidders since he had received a bribe to sell to CVC.
Constantin owned a 16.7pc stake in F1 which had a balance sheet value of €204m. However, this was sold to BayernLB in 2003 for just €8.5m.
In return for Constantin agreeing to sell its stake for a low valuation, the bank committed to a profit share agreement. If BayernLB had sold its F1 stake for more than $1bn then Constantin was due to get around 10pc of the amount above that threshold.
CVC only paid $839m whilst Bluewaters claim they offered $1.1bn for the entire stake CVC acquired and therefore Constantin claims that it lost $171m because it was undervalued.
Ecclestone’s view on the matter is as follows, “This is a case where he is saying because of the actions that allegedly took place he lost money. Because the shares were sold cheap. His problem is people from the bank said the shares weren’t sold cheap…In the end CVC gave a very good price for the shares.” ‘Very good’ may not have been enough though.
Ecclestone claims he has been approached with an offer to settle the case but it has been rebuffed. TJ13 reported in October that Mr. E’s representatives had offered the German prosecutors a cash settlement for dropping the impending bribery charges (true if ironic and unbelievable).
Commenting on the latest legal action being brought against him Ecclestone says, “All this is about finding a way to get money. It is as simple as that…Dieter Hahn had some intermediary, who is a friend of ours, to talk to me about ‘you know you should settle, you don’t want to go to court’. I’m not settling. The judge will settle the case.” (Gavel bangs).
The trial has been listed for a 5 week hearing and when asked, Constantin’s representative, Keith Oliver of Peters & Peters, declined to comment on any matter pertaining to the case.
Many attribute the style of Ecclestone’s dealings in F1 over 30 years as ‘divide and conquer’, ‘wheeler dealing’, ‘bullying tactics’ and ‘sue me if you dare because I’ve got more money for legal fee’s than you’. Yet it appears this approach may have made Mr. E many enemies of rich and powerful people and institutions who are out to redress the wrongs they feel have been done.
There are a number of other cases now pending citation against F1’s supremo that TJ13 has reported upon in the past 4 months. There appears to be a ‘pack’ beginning to form and even billionaires when fighting multiple legal actions across the continents of the world find out quickly how ‘big ticket’ cases can escalate. Could it be the Ecclestone fortune is at risk as the legal bills begin to take their toll. It could certainly become a very time consuming matter for Mr. E.
CVC who have been Ecclestone’s most stalwart supporters have already publically instructed an executive ‘search and select’ agency to identify possible replacements for Mr. E, though he denies he will be replaced anytime soon either with or without his agreement.
There’s an old saying, ‘every dog has his day’ where the inference is that when that day is done, it is all over. If there is a concerted effort from those across the world with very deep pockets who feel they have been grievously treated by Ecclestone to seek restitution, the end of an F1 era may be a lot closer than most F1 people think.