Force India was placed into administration on Friday, reportedly after Sergio Perez brought an application over a £3 million debt owed to him.
It has long been known that the Formula 1 team is in financial trouble with rumours of a pending buy-out doing the rounds for months.
The situation came to a head on Friday when the F1 team was placed into administration following a court hearing in London.
“An administrator was appointed by the court for Force India F1 this evening,” deputy principal Bob Fernley to Reuters.
— Sahara Force India (@ForceIndiaF1) July 27, 2018
According to reports the action was triggered by their driver Perez over an unpaid debt.
Perez, who told journalists at the Hungaroring that Force India’s financial situation is “critical” is owed £3 million by the team.
His legal team told the courts Force India “is or is likely to become unable to pay its debt”.
The application was supported by Mercedes, who Force India are believed to owe around £9 million.
Force India are hoping to announcement investment in the team in the coming weeks with Russian billionaire Dmitry Mazepin believed to be in talks with the midfield team.
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