English Premier League club in London’s High Court over ownership dispute as improved bid comes in from Singapore.
|Liverpool fans have protested against US ownership but could end up with a different set of Americans in charge [EPA]|
Hours after supporters of one of football’s most famous teams cheered the decision of a London court that seemed to clear the path for a much-desired sale, Liverpool Football Club’s two American owners won an 11th-hour restraining order from a US federal court in Texas that put a halt to the celebration.
Liverpool’s board – and Royal Bank of Scotland (RBS), the club’s lenders – ended two days in court on Wednesday with a ruling from Judge Justice Floyd that their American owners, unpopular among the team’s English supporters, could not block the sale of the English Premier League club.
But owners Tom Hicks and George Gillett sued in a Texas district court later in the day, claiming $1.6 billion in damages and alleging that Liverpool’s chairman, an appointee of RBS, and the other board members had perpetrated an “epic swindle” by trying to sell the club for less than half its supposed market value.
Hicks and Gillett obtained the restraining order five minutes before the club’s board began a post-court meeting on Wednesday night that would’ve likely approved the club’s impending $477.2 million sale to New England Sports Ventures (NESV), the owner of the baseball team Boston Red Sox, ahead of an October 15 deadline to repay a $375.6 million debt.
“The independent directors consider the restraining order to be unwarranted and damaging and will move as swiftly as possible to seek to have it removed,” the club said in a statement.
The Financial Times newspaper reported that the board might ask a UK court to decide that the Texas court has no jurisdiction. For now, as Liverpool’s debt comes due, the next few steps remain unclear.
If the repayment date with major creditor the Royal Bank of Scotland (RBS) is missed, the five-time European champions and historically England’s most successful football club could be put into administration and docked nine points.
Already sitting in the relegation zone with six points from seven games, that could spell disaster for manager Roy Hodgson’s side.
Power struggle across the pond
The Liverpool Football Club ownership battle came to London’s High Court court after owners Hicks and Gillett tried to sack members of the board last week in a last-ditch bid to keep control of the club.
Floyd told a packed courtroom that Hicks and Gillett had been guilty of the “the clearest possible breach” in terms of corporate governance rules and their bid to sack the Liverpool board. He ordered the two to pay RBS’ court costs and said an appeal of his decision would be “inappropriate”.
The judge spoke for around an hour in his summing-up on Wednesday as protests against the owners continued in the street outside.
Both Gillett and Hicks phoned into the Wednesday night board meeting.
In their lawsuit, the two said that board chairman Martin Broughton, an RBS appointee, and his fellow directors had acted as “pawns” of RBS, which had “improperly used its influence as the club’s creditor … to prevent [Hicks and Gillett] to recover any of their initial investment in the club, much less share in the substantial appreciation in the value of Liverpool FC that their investments have created”.
Other buyers still waiting in the wings
NESV welcomed the Judge Floyd’s earlier decision and said it had a binding agreement to buy the club.
“We are ready to move quickly and help create the stability and certainty which the Club needs at this time,” the group said a statement.
“I hope that when the board is reconstituted tonight that it will not simply ratify a sale to NESV but will consider all the offers before them”
Peter Lim, LFC bidder
“It is time to return the focus to the Club itself and performances on the pitch.”
Broughton told Sky Sports News after the hearing that he was “disappointed” that Gillett and Hicks had tried to breach the undertakings he said they had given him.
He continued: “The board has to be reconstituted and then re-sit this evening. I can’t pre-judge what the board is going to say.”
Lawyers for Hicks and Gillett admitted to the court on Tuesday that the two men had breached their contract with RBS by trying to reshape the board but said they had been forced to do so because those members were not considering alternative offers.
The two men argued they should be given more time to find a better offer.
A second, higher bid emerged on Tuesday when Singapore billionaire Peter Lim said he was ready to make an increased cash bid for the club of $507 million.
“I welcome the decision of the court,” Lim said in a statement on Wednesday. “I hope that when the board is reconstituted tonight that it will not simply ratify a sale to NESV but will consider all the offers before them.”
Lawyers for Hicks and Gillett told the court a third group, Mill Financial, had also shown an interest in the Merseyside club.
It was not yet known whether the pair would launch an appeal.