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Formula 1’s Manor team collapse, following administrators fail to find a buyer

Manor, the team which started life as Virgin Racing in 2010, have ceased trading today, Friday 3rd February, after administrators FRP Advisory have failed to find a buyer for their operating company, Just Racing Services.  While this doesn’t definitively spell the end for Manor, who have experienced administration once before in 2014, if a buyer was to come in now, it would be unlikely for the team to be ready to compete in the opening race of the upcoming championship.  There have been calls for stricter regulations into F1, particularly in the distribution of prize money amongst less well-established teams.

What are the circumstances behind the collapse?

F1 racing team Manor have folded, as administrators been unable to find a buyer for the company.  Their operating company, Just Racing Services, have been in administration since 6th January, and their administrators FRP Advisory have failed to find a buyer.  Trading at Just Racing ceased on Friday, signalling the end of the Manor team.  The staff were sent home, and informed they would be made redundant by the close of business on Tuesday, after being paid their salaries for January.  Geoff Rowley, joint administrator stated that ‘no solution could be achieved to allow for the business to continue in its current form.’

While things may be looking down, this doesn’t necessarily mean the end of Manor, as a buyer could still come in to buy the remains of the team.  If a buyer was to come in, it would be difficult for Manor to start the F1 season on the 26th March, leaving the competition, only days ago taken over by US company Liberty Media, with only 10 teams to start the season.

After beginning life as Virgin Racing in 2010, the company has been through several iterations already.  This is not the first time Manor has been in administration, having done so previously in October 2014, only to be saved by energy firm Ovo’s boss, Stephen Fitzpatrick. Fitzpatrick has blamed poor team performance in the championship, costing the team nearly £12million. 

When Manor began life in F1 in 2010, then president Max Mosely promised that a £40million budget cap would be introduced, however this was abandoned when Mosley stepped down following a dispute with the existing teams.  Interestingly, the 2 teams that joined the championship at the same time as Manor have collapsed as well.

Anneliese Dodds MEP has asked for an investigation by the European Commission into F1 and the FIA in the wake of Manor’s collapse.  She cites the reason for this is concern at the loss of jobs, after 7 ‘turbulent’ years, and that the unfair allocation of prize money favours the biggest and best-established teams.

Contact MLM Solutions

MLM Solutions understands than financial challenges are stressful, but our dedicated team, with offices across Scotland, are here to help.  If you need advice on debt, financial recovery, or restructuring, arrange a no-obligation options review by calling 0141 413 9086.

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