22 January 2014
Ecclestone avoids US lawsuit over F1 sale
The New York Supreme Court has dismissed another legal challenge prompted by the sale of F1 rights back in 2005.
He may be the subject of ongoing European proceedings relating to the sale of F1 rights, but Bernie Ecclestone has been told that he will not face similar charges in the USA.
The man who has controlled F1 for the past 40 years is still waiting on the outcome of a High Court case brought by German media group Constantin Medien, which alleges that it was cheated out of a share of the proceeds when BayernLB's stake in the sport – in which it had a financial interest – was sold to current rights holder CVC.
Ecclestone was the most recognisable of four defendants accused by Constantin, and the case – while still under review by Mr Justice Newey - now looks set to act as a benchmark for possible future actions being mooted in both Germany and Switzerland. The former was originally scheduled for 2013, but postponed until this year while a panel of judges deliberated on the merits of a case and Ecclestone's legal team was given more time to prepare.
During the seven-week trial, Ecclestone was accused of making a 'corrupt bargain' with banker Gerhard Gribkowsky to keep the value of the stake at a sufficiently low price to attract CVC, a company he knew was open to retaining him as the head of the sport. Ecclestone was accused of paying Gribkowsky a $44m bribe to secure the deal, but has always insisted that the payment – which he does not deny making – was the result of Gribkowsky blackmailing him with the threat of revealing his tax affairs. The German has since been jailed on charges of bribery and tax evasion and is serving an eight-year stretch.
While attention focused on the European cases, meanwhile, a $650m was being prepared in the USA, where investment firm Bluewaters claimed it had been the highest bidder for the rights, which eventually went to CVC for a cool $2bn.
According to Autoweek, Bluewaters' initial offer – made for the 75 per cent stake held by BayernLB, JP Morgan, and Lehman Brothers - was half of the eventual selling price, but came with a cover letter, addressed to Gribkowsky, confirming that it was prepared to pay 'ten per cent more in cash consideration ... above any genuine bona-fide offer put forward by any other accredited buyer'.
The report says that the case was originally brought in November 2012, with Bluewaters suing Ecclestone, Bambino, CVC and Gribkowsky for damages, claiming that CVC's profits from F1 'rightfully belong to Bluewaters and its financial backers'. The case was this week dismissed by the New York Supreme Court on the grounds that 'critical events' relevant to the claim had taken place in 'Germany, England and elsewhere in Europe'.
Prior to moving to New York, Bluewaters had been based in Jersey, but Eileen Bransten, Justice of the Supreme Court, dismissed the case, insisting that no copy of the alleged cover letter had been submitted to the court and that, under the terms of CVC's offer, any legal matter arising from the sale had to be handled by the English legal system.
“This action is not about a lost business venture in New York, but rather on allegations that an English citizen bribed a German citizen to compel a German bank to sell its interest in a Jersey company to an English company rather than another Jersey company,” Bransten was quoted as saying, dismissing Bluewaters' hopes that, because the deals were done in US dollars, the case could be heard in a US court.
Ecclestone last week stepped down from the board of the company that runs the sport, but would remain in control 'on a day-to-day basis', albeit subject to 'increased monitoring and control'.
He continues to protest his innocence.
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