Phoenix Finance: From Ashes to Ashes

In the 5th Century BC, the ancient Greek historian Herodotus wrote a commentary about the mythical phoenix, writing that “the Egyptians have [a] sacred bird called the phoenix which I myself have never seen, except in pictures. […] They tell a story of what this bird does, which does not seem to me to be credible…” Thousands of years later, those musings accurately describe the story of another Phoenix which briefly rose from the ashes of the beleaguered Prost Grand Prix. Allow GPRejects.com to tell the tale…

Failing to recover from losing most of their sponsors, Prost were liquidated in 2002.

Failing to recover from losing most of their sponsors, Prost were liquidated in 2002.

After four seasons of struggling against the tide, Prost Grand Prix were liquidated in January 2002. Despite reported offers from the Saudi billionaire Prince Alwaleed bin Talal and former shareholder Pedro Diniz, Alain Prost was recalcitrant in talks to sell his eponymous outfit and instead found his team being wound up; a fruitless search for sponsors over the winter proved the final nail in the Prost coffin. After folding, the Formula One vultures hovered over Guyancourt to cherry-pick the newly-redundant talent and assets on offer.

One of the bigger names linked with the Prost assets was Craig Pollock, who had recently been ousted from his team principal role at BAR. Pollock was rumoured to be in talks with General Motors, but this appeared to be nothing more than paddock whispers. At the end of February, it emerged that the buyer of Prost’s assets would be none other than Tom Walkinshaw, owner of TWR and the principal of the Arrows team. Walkinshaw had been the man in charge of Jaguar’s success at Le Mans in the late 1980s, and had also been in positions of authority at both Benetton and Ligier prior to his purchase of Arrows.

The aborted Prost AP05 wind tunnel model. Phoenix purchased the IP rights, but had no way of building the car.

The aborted Prost AP05 wind tunnel model. Phoenix purchased the IP rights, but had no way of building the car.

Currently mired in a court battle with Jos Verstappen following his decision to bench the Dutchman in favour of Heinz-Harald Frentzen, Walkinshaw’s bid to buy Prost’s assets was met with confusion in many quarters of the Formula 1 fraternity. At the time, Arrows were in dire financial straits, and the cynical opinion was that Walkinshaw was hedging his bets with an outfit with significantly less debt. After successfully convincing the Tribunal de Commerce de Versailles that TWR should not be liable for payments to Prost’s former creditors which contributed to their demise, Walkinshaw seemingly managed to secure Prost’s F1 entry, the AP04s from 2001 and the designs and IP of the planned 2002 car, all for a tidy sum of $2.6m. Surely, this was too good to be true.

It emerged shortly after that Walkinshaw was not putting these deals in place entirely for himself. Assigned to preside over the liquidation of Prost, Monsieur Cosme Rogeau divulged in a press release that the assets were not being sold to TWR, but instead to a company known as Phoenix Finance Ltd. Phoenix were represented at the tribunal by a man named Charles Nickerson, a long-time friend of Walkinshaw’s. Nickerson’s family had previously owned a number of businesses within the agricultural sector including seed distributor Nickerson Seeds, and in purchasing the assets (and hence Prost’s entry) Phoenix would be entitled to $12m of TV money if they were able to make the grid and assume Prost’s place as a signatory of the Concorde Agreement.

Believing that Prost’s entry would be dead and buried, Minardi owner Paul Stoddart was apoplectic with rage over Walkinshaw’s manoeuvrings in the French courtrooms, as Minardi stood to claim the $12m if Prost were unable to return; for a team plagued with limited finance, $12m presented a huge opportunity for Minardi. Launching a scathing attack on Walkinshaw, Stoddart made his feelings on the Phoenix rumblings crystal clear:

“To me, liquidation is and always has been the final chapter in a company’s history, therefore it can’t come back from the dead unless all the creditors are paid and unless all the employees are paid. This seems to me that they’ve all been f**ked over. Why am I not surprised? Look at whose name is attached to it!”

Rogeau’s next press release allayed Stoddart’s fears. He clarified that the sale of Prost’s assets did not include the team itself. This was not unexpected, as TWR wanted to set up a new outfit and in doing so moving transferrable assets to England; Walkinshaw and Nickerson did not want the entirety of the former Prost team and all of their baggage. However, as intimated by both the FIA and Rogeau, the entry belonged to Prost Grand Prix. To enter Formula 1, Phoenix Finance would have to register as a new team, and hence would be subject to the $48m entry bond that the FIA requires to provide a new entry.

Former Prost driver Gaston Mazzacane secured a provisional deal with Phoenix. Here he is testing for Arrows in 2000.

Former Prost driver Gaston Mazzacane secured a provisional deal with Phoenix. Here he is testing for Arrows in 2000.

Regardless, Walkinshaw and Nickerson continued their work on the Phoenix plans and planned to join the grid at Malaysia, the second round of the 2002 Formula One World Championship. Walkinshaw was supplying engineers from his successful TWR Engineering firm to the cause, perhaps at a time where he should have been concentrating on his Arrows operation. For Malaysia, Phoenix appeared to be preparing a pair of Prost AP04 chassis, mating them to a set of 1998-spec Brian Hart-designed TWR engines and a spare supply of gearboxes. Former Prost and Minardi driver Gaston Mazzacane had also agreed a deal to drive with Phoenix, backed by South American cable company PSN.

At Melbourne, the 2002 season opener, talk about Phoenix began to swirl around the paddock. The team had not arrived in Australia, but had submitted a pair of nosecones for scrutineering (which, perhaps ominously, failed the stewards’ requirements). Commercial rights holder and F1 supremo Bernie Ecclestone had caught wind of their intentions, and expressed his forthright opinions in The Times:

“[Nickerson has] bought nothing in Formula 1. All he has bought is some show cars. He can forget it. He is wasting his time thinking about racing in Malaysia.”

Max Mosley later confirmed that the FIA had received no contact from Phoenix or its representatives over an entry, and Paul Stoddart was threatening legal action if the Concorde Agreement was ignored. Phoenix appeared to have caused a little fire in F1 quarters, but ultimately amounted to nothing more than a damp squib.

Ex-Minardi driver Tarso Marques joined Phoenix in Malaysia, but the cars never left customs.

Ex-Minardi driver Tarso Marques joined Phoenix in Malaysia, but the cars never left customs.

After much debate and consternation, Phoenix eventually rocked up in Malaysia with their AP04s in the back of a transporter, with Mazzacane and former Minardi driver Tarso Marques in tow to drive should the opportunity arise. It didn’t. The cars were immediately impounded on arrival, and FIA officials ruled Phoenix out from competing thanks to the lack of an entry, opposition from FOM and from almost all of the current teams. Phoenix’s hopes had turned to ash, and for all of the effort expended on fighting to be on the grid, it was a surprise that Walkinshaw didn’t see this coming.

However, this wasn’t over. Phoenix Finance insisted were in possession of a Formula 1 team, and made the effort to distribute a press release to announce their plans to challenge the FIA’s decision. Humorously, this release was distributed by Arrows’ press officer, who had surreptitiously swapped her Orange Arrows teamwear for Phoenix blue beforehand. Attempting to quote a previous statement from Cosme Rogeau, the team implied that a proposal had been sent to the FIA to transfer Prost’s former Concorde Agreement benefits to Phoenix Finance, despite Mosley’s previous assertations that they had made no contact. Things were going to get incredibly messy.

Phoenix’s next move was to confuse and confound. Perhaps considering that there had been very little rising from the ashes, Phoenix Finance Ltd decided to rename to DART Grand Prix. It later emerged that DART was the name of a company owned by Tom Walkinshaw in the 1980s, and was a distributor of Dunlop racing tyres. This move was perplexing considering that the team had limited time to reach the grid, and needed to focus on getting their legal affairs in order (and even more perplexing after they changed it back to Phoenix only days later). According to the Concorde Agreement, a team could miss a maximum of two races in the season, and so DART/Phoenix, Nickerson and Walkinshaw needed to have an answer by March 25, 2002: the date on which freight from the UK was shipped to the next race in Brazil.

However, all was quiet on the Phoenix front. Walkinshaw tried to convince team bosses at Brazil to accept a 12th team (with little success), and there were rumours that Craig Pollock had been contacted with a view to joining Phoenix as a representative, but this came to nothing. Then, in April, they decided to push their luck further in the courtrooms. A date was set in May at the London High Court, with Phoenix alleging that the FIA and FOM had blocked their team from competing with a “legitimate” entry. Nickerson seemed convinced that he and Walkinshaw were in the right:

“I have read the communiqué from the FIA which is blocking Phoenix from participating in the Malaysian Grand Prix. It seems that the legal advice which they have received is seriously flawed; either the FIA’s advisers have misunderstood the judgement of the French court or were not in possession of all of the information when they gave us their advice.”

Despite Nickerson’s assured comments, the entire pursuit seemed folly; Phoenix barely had a leg to stand on and no tangible assets save for some cars, engines and a few pieces of paper. The FIA argued that Prost’s racing license was revoked by the French motorsport association, and although Phoenix had acquired a new one from the MSA, the fact that it was withdrawn in the first place was considered grounds for the FIA to require the $48m entry bond. The Right Honourable Sir Andrew Morritt presided over Phoenix’s appeal, and ruled that Phoenix had no entitlement to be allowed to race. In the aftermath, Phoenix were ordered to pay legal expenses by the High Court, judged to be approximately $1.2m; with a bang of the gavel, any hopes of a twelfth team in F1 had evaporated.

Even though Charles Nickerson was Phoenix's representative, Arrows boss Tom Walkinshaw appeared to be pulling most of the strings.

Even though Charles Nickerson was Phoenix’s representative, Arrows boss Tom Walkinshaw appeared to be pulling most of the strings.

There is endless speculation over Walkinshaw’s role in the whole Phoenix affair. There are suggestions that he was looking to move his Formula 1 focus to an outfit with little debt; Arrows hit the wall later in 2002, thanks to their expensive Cosworth supply, further court outings and the subsequent settlement of Jos Verstappen’s broken contract, and the potential loss of Orange as a sponsor. Whether he was truly helping Nickerson become a team owner in F1, or just using his former colleague as a figurehead, perhaps the truth will never be known; Walkinshaw passed away in 2010 after losing a lengthy battle against cancer.

To conclude with a hypothetical question, what if Phoenix had somehow convinced Mosley, Bernie and the other team bosses to let them race? How would the AP04 fare with a 1999-spec Arrows engine in the back? Perhaps the most realistic assessment comes from then-Toyota driver Mika Salo, who had experience of those engines in his short-lived time at Arrows. He gave his damning verdict over the 2002 Malaysian Grand Prix weekend:

“I don’t know why everyone is so worried about Phoenix. There’s no way they’ll qualify with those engines, trust me.”

Perhaps the FIA were ultimately trying to spare Phoenix’s blushes after all. Regardless, after their humiliating time in the High Court, Phoenix would never rise again.

Sources: Diariomotor.com, grandprix.com, BBC Sport, FIA, F1 Racing