Arrows Bid Put on Hold Pending Legal Hearing

A bid by Formula One team Arrows to put themselves into administration while they seek to secure a financial rescue deal is to be put on hold after a High Court ruling today.

Lawyers for Arrows said they would apply to adjourn the administration petition, due to be heard on December 2, until Mr Justice Lightman decides if the major creditor Morgan Grenfell has a security over Arrows's assets.

That hearing, which may lead to Morgan Grenfell seeking to appoint an administrative receiver over Arrows' assets, is now set to begin on December 9 at the High Court, and is expected to last 10 days.

Justice Lightman will also decide whether Morgan Grenfell has a guarantee from Arrows' founder Tom Walkinshaw, a separate defendant to the claim, to recover any shortfall.

"It is a matter of great urgency for the parties and creditors generally to know whether or not this security is valid," Lightman said during Monday's hearing.

The cash-strapped Formula One racing team, which have never won a race, said last week they had signed contracts with a group of German-based investors to try to underpin their future. Arrows missed six races last season, have no main sponsor and have lost many core team members.