KEY POINTS:
About a third of Team New Zealand's staff have been laid off because of the financial squeeze behind yesterday's legal attack against America's Cup holders Alinghi.
More than 20 people have been made redundant and others switched to retainer-based payments as the sailing syndicate stretches its budget to take account of the ongoing delay to the next regatta.
Team New Zealand yesterday launched a twin-pronged legal case, seeking tens of millions of dollars in compensation and damages, and accusing Alinghi and its billionaire head Ernesto Bertarelli of acting in an anti-competitive manner.
Team New Zealand are represented by New York lawyer David Boies, who successfully represented the US Government in its competition law action against Microsoft.
Papers filed yesterday say Alinghi's actions have led to a "serious risk [Team NZ] will not survive to challenge" or will be "a team whose resources are seriously depleted and whose competitive abilities are thereby seriously weakened".
The next cup was scheduled for 2009, but was postponed in November amid a courtroom war between Alinghi and United States challenger BMW Oracle.
Managing director Grant Dalton told the Weekend Herald the team were having to stretch their two-year budget over three or even four years.
"We've had to go through a round of redundancies and people have lost their jobs through absolutely no fault of their own. Kiwis have lost their jobs, through the actions of one man [Bertarelli]."
The redundancies mostly affected support staff, but most departments were hit, said Dalton.
Design work is continuing and members of the sailing crew, held on retainers, are racing on other classes of boats in regattas during the European summer.
At the centre of the compensation claim is an agreement signed between Dalton and Bertarelli before Team New Zealand confirmed its entry for the next cup.
"There were two quite key points in that [contract] _ the first was that it would be in'09 and the second that it would be in Valencia and they happily contracted those things on which basis we commenced work," Dalton said.
Late last year, Team NZ wrote to Bertarelli seeking compensation on the basis that the contract was not being honoured.
"Frankly, they didn't have the courtesy of even replying," said Dalton.
Oracle last year alleged Alinghi's "challenger of record", CNEV, was illegitimate and that the Swiss defender had set rules for the next cup which were unfairly weighted in its favour. It wanted the court to impose it as the challenger of record and to endorse more traditional cup rules.
A proposed out-of-court settlement, agreed to by Oracle and other challengers, would have seen the event go ahead in 2009, but it was rejected by Bertarelli.
AC Management announced on November 22 that the cup was to be postponed, saying Oracle was "holding the event to ransom" by its court action. A preliminary ruling has gone in Oracle's favour but a final decision has not yet been issued.
Alinghi's lead counsel said it was disappointed in Team NZ's actions "given their previous public acceptance and commitment to the competition".
"These actions are totally without merit, wildly miss the target and will be defended rigorously," said Lucien Masmejan.
"We share the sailing community's frustration in the delays affecting the America's Cup but Alinghi, as trustee, is duty-bound to defend its position in the current legal action and to preserve the integrity of the America's Cup."
Mr Masmejan said Alinghi had repeatedly made it clear that the Swiss team welcomed a swift court resolution and wanted to get the competition going again as soon as possible.
CLAIM AND COUNTER-CLAIM
TEAM NZ ALLEGE:
Alinghi has failed to honour an agreement that the next regatta would be in Valencia in 2009.
That Alinghi is trying to monopolise the market for the rights to hold the America's Cup.
That Alinghi is damaging the Cup, weakening competitors and is harming future racing.
ALINGHI RESPOND:
Team New Zealand's claims are "without merit, wildly miss the target and will be defended rigorously".
It is as frustrated as anyone about the postponement of the next regatta.
