By Christian Sylt, Crain News Service
NEW YORK (Feb. 4, 2014) — American investment fund Bluewaters Communications Holding L.L.C. has appealed the recent decision by the New York Supreme Court to dismiss the firm's $650 million lawsuit against Formula 1 boss Bernie Ecclestone.
Bluewaters claims that it was the highest bidder when F1 was sold to private equity firm CVC Capital Partners in 2006 for $2 billion. Its lawsuit claimed that Mr. Ecclestone and his Bambino family trust paid a $44 million bribe to Gerhard Gribkowsky, the German banker in charge of the sale, so that he would steer F1 to CVC. The private equity firm allegedly was Mr. Ecclestone's preferred bidder as it had agreed to retain him as the boss of the series.
Bluewaters sued Messrs. Ecclestone, Gribkowsky, Bambino and three key F1 companies, which are all based on the British island of Jersey: Alpha Prema, Alpha Topco and Delta Topco. It demanded $650 million in damages from the defendants because it claimed that CVC's profits from F1 "rightfully belong to Bluewaters and its financial backers."
The lawsuit was dismissed on Jan. 16 due to a legal principle known as forum non conveniens. This enables a court to refuse to hear a case if it believes there is a more appropriate jurisdiction. Eileen Bransten, justice of the Supreme Court, ruled that "the 'critical events' underlying the claims in this lawsuit took place in Germany, England and elsewhere in Europe."
However, on Jan. 30, Bluewaters filed an appeal under the Individual Assignment System (IAS) which allows for the continuous supervision of each case by a single judge. It stated that "the trial court dismissed the above-captioned action for forum non conveniens , as well as lack of personal jurisdiction with respect to Defendants-Respondents Alpha Prema, Alpha Topco, Delta Topco, Ecclestone and Bambino.
"Plaintiff-Appellant seeks reversal of the Orders and Memorandum Decision on the grounds that the IAS Court erred in (1) dismissing the case for forum non conveniens and (2) dismissing the case for lack of personal jurisdiction over Defendants-Respondents Alpha Prema, Alpha Topco, Delta Topco, Ecclestone, and Bambino."
It is unclear from the appeal what evidence Bluewaters intends to bring before the court in order to change its decision. A more serious problem could be the lack of evidence at the heart of the case which has already been noted by Justice Bransten.
Bluewaters claims that its offer was submitted with a cover letter to Mr. Gribkowsky saying that it "is prepared to pay 10 percent more in cash consideration...above any genuine bona-fide offer put forward by any other accredited buyer."
However, in her ruling, Justice Bransten said that "no party has submitted a copy of this alleged cover letter."
One would expect that this issue would need to be resolved before the case could possibly succeed.
Even if the Bluewaters' lawsuit is denied again, Mr. Ecclestone still faces the prospect of further litigation. He is due to be put on trial in April in Germany for paying the alleged bribe, and he is currently awaiting the verdict of another lawsuit connected to the sale to CVC. German media rights firm Constantin Medien sued him in London claiming that other bidders would have paid more than CVC.
However, the only one that has come forward is Bluewaters and, in the absence of its cover letter, it remains to be seen whether its offer was indeed higher.
This report appeared on autoweek.com, the website of Autoweek magazine, a Detroit-based sister publication of Tire Business.
Are you paying attention to the ups-and-downs of the stock market?
|Yes, I invest in the market||
|Yes, but I mostly keep an eye on just my company's stock||
|No, it makes me nauseous||
|I’m glad I don't invest in the market; I would have lost my shirt||
|Total votes: 99|