Formula E sues city over cancelled races
The organizers of last summer’s disappointing Formula E race say that the City of Montreal and Mayor Valérie Plante are on the hook for $50 million.
Formula E Operations Ltd. (FEO) is suing Valérie Plante and the city of Montreal for damages caused by the city’s decision to cancel the 2018 and 2019 Formula E races in Montreal. The organization says that the city mismanaged the event and had a binding legal agreement to host it for at least two more years.
The lawsuit, filed on Thursday, alleges that former mayor Denis Coderre and his administration entered into a binding contract with FEO on behalf of the City of Montreal which was broken by Plante and her administration when they cancelled plans to hold the race in 2018 and 2019. It states that FEO suffered more than $21 million in damages as a result of the race cancellations.
Montréal c’est éléctrique (MCE), the bankrupt non-profit organization initially set up by the city of Montreal to organize the Formula E races, is also part of the lawsuit.
PwC Canada, the firm overseeing the bankruptcy of MCE, is asking the city for more than $33 million to pay MCE’s creditors.
“Mayor Plante and the city acted in an impulsive, arbitrary, abusive and detrimental manner ... they knowingly caused harm to FEO and MCE,” the lawsuit reads. The city plans to fight the suit. “We reject the claims of Formula E and we plan to contest them,” spokesperson Marc-André Viau said in a statement. “We will not comment further for the moment since this issue is before the courts.”
In December, Plante’s administration offered to build a new racetrack, or suspend the event for one year and then hold it at Circuit Gilles Villeneuve — the Formula One track on Île-Notre-Dame — but FEO didn’t accept.
On Dec. 18 2017, Mayor Plante and her administration announced that they were pulling the plug on the event.
She said the price of staging the event again next summer would simply be too high, considering it would cost up to $10 million just to build a new temporary track, on top of costs still not recovered from the first edition, which she estimated would come in at $40 million.
Plante blamed her predecessor for mismanaging last year’s event, saying it was clear in May 2017 that it was heading toward a financial fiasco.
The FEO lawsuit accuses the city of knowing that MCE wouldn’t be able to properly organize the race. It also accuses the city of knowing that hosting the race would result in a “structural deficit” for MCE.
On May 28, Montreal’s inspector general released a scathing report accusing Coderre’s office of ignoring advice from the city ’s own lawyers by maintaining tight control over MCE rather than allowing it to operate independently. From the start, the Formula E race “was entirely managed by the mayor’s office,” it said.