Thursday, February 17, 2011

Lotus vs Lotus - Proton says Tony’s demands are unreasonable

Settlement offer includes returning Team Lotus name to Group Lotus but does not prevent Tony from using it in F1, subject to terms

While 1Malaysia Racing Team (1MRT) boss Tony Fernandez told AFP that the GBP6 million offer Group Lotus made for the Team Lotus name was too small, the other side says that it is fair compensation for the purchase price of Team Lotus Ventures, the company that allegedly had the rights to the name.

In a statement, Group Lotus parent company, Proton Holdings Berhad said that for all intents and purposes, 1MRT cannot now demand for Group Lotus to compensate them for a problem, which they got themselves into.

“1MRT entered into a relationship with Team Lotus Ventures with full prior knowledge that Group Lotus are already in a long standing legal dispute with Team Lotus Ventures.

Group Lotus and Proton have always held the view that this matter should be resolved as soon as possible in the interests of Formula 1 and the fans. Thus, we remain open to reasonable and justified proposals.

According to Proton, in November 2010, 1MRT proposed a settlement of between GBP22mil to GBP37mil which included the purchase of the Team Lotus name (purportedly for GBP5mil) and other indirect costs that they have incurred such as development of a new brand, loss of income from produced merchandise, loss of sponsorship etc.

“We agreed to only consider paying for the Team Lotus name subject to due diligence being conducted and not be made responsible for the indirect costs which could have been avoided by 1MRT

“Our proposed settlement sum was to settle only the purchase price, allegedly GBP 5million for the "Team Lotus" name, subject to due diligence and confirmation from 1MRT and other related parties including Team Lotus Ventures and David Hunt.

“Once settlement is agreed by both parties, the "Team Lotus" name shall unequivocally vest with Group Lotus.

“From our perspective, this is fair as 1MRT could have continued to use the "Lotus Racing" and not incur additional charges allegedly in excess of GBP30 million for the establishment of a new team.

“PROTON and Group Lotus cannot be made liable for their commercial misadventure.

Earlier in the week Fernandez told AFP that he has rejected the out of court settlement worth GBP6 million offered by Group Lotus.

“It was six million pounds for an out-of-court settlement. Of course I would like to end it but the proposal by Proton would have bankrupted the company. We could not accept it,” the AirAsia chief told AFP, adding that 250 jobs and huge investments by shareholders are at stake.

Fernandez had bought the rights to Team Lotus from David Hunt, brother of former F1 World Champion James who had bought the defunct team some 13 years ago.

The decision to purchase the team came on the tail of Proton’s decision to terminate the licensing agreement with Fernandez.

Proton had cited multiple breach of contract and refusal to cooperate as the reason for terminating the licensing agreement.

1 comment:

  1. the guy is greedy as he is unfair in business.