Ecclestone’s troubles mount as German state bank seeks $400 million in damages (Update) UPDATE Formula One boss Bernie Ecclestone said he would fight a $400 million damages claim that German bank BayernLB is planning to file in London over the sale of the motor racing business in 2005.
The fresh threat of legal action is the latest fallout from the deal eight years ago, in which private equity fund CVC acquired control of Formula One from a group of banks including BayernLB.
German company Constantin Medien is already seeking more than $100 million from the 83-year-old Ecclestone in a separate case which is close to concluding in the High Court in London.
Ecclestone is accused of undervaluing Formula One to favor a sale to CVC that kept him in charge of a business he had built up over three decades.
"If we get sued, we'll probably have to go to court, which is what we did with this last (Constantin) case," Ecclestone told Reuters on Thursday.
BayernLB had said on Wednesday it planned to bring a $400 million damages claim against Ecclestone in London next month.
Ecclestone said his lawyers had told him the vast majority of such damages claims were settled out of court, but he had no intention of doing so. "They picked the wrong person with me," said the British billionaire.
Legal problems stemming from the CVC sale threaten to end Ecclestone's long hold on a sport that attracts hundreds of millions of television viewers to its series of grand prix races held around the globe.
The legal issues also make it hard to revisit stalled efforts to launch an initial public offering of Formula One on the Singapore stock market.
CVC paid about $830 million for BayernLB's 47 percent stake in Formula One, after the business had fallen into the hands of a group of banks following the collapse of German media company and controlling shareholder Kirch.
Giving evidence in the Constantin case in the High Court last month, Ecclestone said he had paid Gribkowsky 10 million pounds ($16 million) as an "insurance policy" because the German banker was threatening to make damaging claims about his tax affairs to the British authorities. Reuters12/11/13 Germany’s BayernLB bank is seeking damages from Formula 1 boss Bernie Ecclestone in connection with an F1 share sale to investor CVC. It claims that Ecclestone bribed a senior bank manager to acquire the package cheaply.
BayernLB was preparing a lawsuit against Formula 1 boss Bernie Ecclestone for €290 million in damages, a spokesperson for the German state-owned lender told the DPA news agency.
The lawsuit would be filed with the High Court in London presumably in January, she told the German news agency, and followed the sentencing of a former BayernLB manager, who admitted that he had accepted a bribe from Ecclestone.
In 2012, a court in Munich jailed BayernLB’s former chief risk officer Gerhard Gribkowsky for eight and a half years. Gribkowsky said he paid Ecclestone a commission in the region of €48 million, of which about €32 million was kicked back to Gribkowsky.
BayernLB said it was demanding that Ecclestone should return the commission in addition to other sums lost by the bank in connection with the sale of a controlling F1 share package to private equity firm CVC.
In 2006, the German lender, which is based in Munich, was the majority shareholder in Formula 1, but sold a controlling stake in the motor racing company to the US-based investor.
BayernLB claims that Gribkowsky sold the stake below its true value because of the graft deal with Ecclestone. CVC allegedly promised to keep Ecclestone on in his role as the sport’s commercial front.
Currently, CVC owns a 35.5-percent stake in F1′s commercial rights, after selling down its holding from 63 percent last year. In November, the firm’s co-Chairman Donald Mackenzie said that plans for a stock market floatation of F1 would be postponed until damage claims against Ecclestone were resolved.
Mackenzie also said that Ecclestone would be fired if he was found to have committed a crime in his dealings with Gribkowsky. (Reuters)