Banks Seek to Strip Ecclestone of a Formula One Stake

March. 4, 2005 Bloomberg reported that three banks which own 75 percent of the commercial rights to Formula One racing are asking a London court to remove Bernie Ecclestone as a shareholder of one of the sport's managing companies.

Lehman Brothers Holdings Inc., Bayerische Landesbank and JPMorgan Chase & Co. claim that a Dec. 20, 2004, board resolution giving the 74-year-old billionaire half the voting shares of Formula One Administration Ltd. is invalid and should be set aside, according to a complaint filed with the U.K. High Court on Jan. 5. A 10-day trial is due to start on May 10.

The case could further erode Ecclestone's 24-year grip on the sport. He bought the stake in the company, which manages the sport along with Formula One Management Ltd., two weeks after the banks won a separate case giving them control of the two units' parent company, Formula One Holdings Ltd.

Lehman, BayernLB and JPMorgan acquired their stakes in the sport after Ecclestone sold a controlling interest in Formula One holding company SLEC Holdings Ltd. to German media company Kirch Holding GmbH for $2 billion. When Kirch collapsed in 2002, the banks took over the company's stake in SLEC in return for the 350 million euros ($462 million) Kirch owed them.

Formula One Administration had net income of $126.5 million on revenue of $642.7 million in 2002, according to the latest figures on file at London's Companies House, which holds public information on U.K. companies.