Liverpool to fight Hicks's and Gillett's 'damaging' injunction•
Hicks and Gillett claim they have an injunction to halt the sale
• Board hold late talks with NESV's John W Henry
Thursday 14 October 2010
The Liverpool board convene at the offices of the law firm Slaughter & May.
Tom Hicks and George Gillett tried last night to derail Liverpool's sale to the owners of the Boston Red Sox by obtaining a temporary injunction in a Dallas court, claiming $1.6bn (£1bn) in damages and calling the sale an "epic swindle". The club immediately responded by vowing to overturn the "unwarranted and damaging" order as talks with New England Sports Ventures continued into the early hours after yesterday's resounding victory in the high court.
As Liverpool's reconstituted board met NESV, on the verge of a deal to buy the club for £300m and bring the tenure of Hicks and Gillett to a close, the pair launched a desperate bid to reopen the sale process. The restraining order appears to prevent a sale taking place before the hearing on 25 October. Now the boards of Kop Football and Kop Holdings accept they must fight to have it removed in order to proceed with the sale to NESV.
A statement on the Liverpool website read: "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 news of the restraining order came in a statement posted on the website of the American law firm Fish & Richardson. The Texas District State Court petition accuses the chairman, Martin Broughton, appointed by the creditors Royal Bank of Scotland in April to oversee the sale of the club, and his fellow directors of acting as "pawns" of RBS to perpetrate an "epic swindle" in selling the club to NESV for less than half its supposed market value and ignoring several higher offers.
It accuses the independent directors and RBS of trying to "prevent any transaction that would permit Messrs 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". Also it claims that RBS acted in a "grand conspiracy".
They stand to lose more than £144m in loans they made to the club if the sale to NESV goes through and will now also have to pay legal costs estimated at between £250,000 and £500,000.
As stated in the high court this week, and accepted by the judge, Broughton led an extensive sale process that whittled down 130 expressions of interest to two serious offers. But Hicks and Gillett claim he was guilty of rejecting a number of higher offers, including one from FBR Capital Markets for between £375m and £400m, and leaking details to the media to undermine their attempts to refinance.
The claim will be greeted with fury by fans who earlier in the day were celebrating a high-court judgment that found in favour of RBS, owed the majority of a £237m loan due for repayment tomorrow, and ordered the Liverpool board to be reconstituted so the sale to NESV could proceed.
Even as their board meeting continued in central London late into the night, Liverpool resolved to complete the sale to NESV, whose principal founder, John W Henry, was present. It is understood that Hicks' lawyers believe that RBS directors, Broughton and the other Liverpool directors will not want to risk being in contempt of a US district court by contravening the order, given their extensive interests in the country. The petition also points out that Broughton held meetings with Hicks in Texas.
Mr Justice Floyd had earlier upheld the claim by RBS for breach of contract against Hicks and Gillett after they attempted to block the sale last week by dissolving the board, contravening an agreement signed as a condition of refinancing last Aprilthat also led to the appointment of Broughton. The QC representing Hicks and Gillett had said in court that the pair accepted their time as owners of Liverpool had come to an end but that they believed the club was worth more than it was being sold for.
Ruling that their actions in seeking to block the deal represented "the clearest possible breach" of a corporate governance agreement signed with RBS in April as a condition of refinancing, Mr Justice Floyd ordered Hicks and Gillett to allow the club's board to be reconstituted in its original form by 8pm last night.
NESV yesterday reiterated that it had a "binding agreement" and was ready to "move quickly" to complete. It has promised to provide £200m to clear the existing acquisition debt and another £100m in working capital. But the Boston Red Sox owner is also named in the complaint. Tom Werner, NESV's chairman who has a background as a senior US media executive, was also yesterday flying to the UK in the hope of concluding the deal.
But the added delay could bring the spectre of administration back into play and the possibility of a nine-point penalty being imposed by the Premier League. The court date of 25 October is more than a week after the RBS loans are due.
Hicks and Gillett claim they have an injunction to halt the sale
• Board hold late talks with NESV's John W Henry
Thursday 14 October 2010
The Liverpool board convene at the offices of the law firm Slaughter & May.
Tom Hicks and George Gillett tried last night to derail Liverpool's sale to the owners of the Boston Red Sox by obtaining a temporary injunction in a Dallas court, claiming $1.6bn (£1bn) in damages and calling the sale an "epic swindle". The club immediately responded by vowing to overturn the "unwarranted and damaging" order as talks with New England Sports Ventures continued into the early hours after yesterday's resounding victory in the high court.
As Liverpool's reconstituted board met NESV, on the verge of a deal to buy the club for £300m and bring the tenure of Hicks and Gillett to a close, the pair launched a desperate bid to reopen the sale process. The restraining order appears to prevent a sale taking place before the hearing on 25 October. Now the boards of Kop Football and Kop Holdings accept they must fight to have it removed in order to proceed with the sale to NESV.
A statement on the Liverpool website read: "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 news of the restraining order came in a statement posted on the website of the American law firm Fish & Richardson. The Texas District State Court petition accuses the chairman, Martin Broughton, appointed by the creditors Royal Bank of Scotland in April to oversee the sale of the club, and his fellow directors of acting as "pawns" of RBS to perpetrate an "epic swindle" in selling the club to NESV for less than half its supposed market value and ignoring several higher offers.
It accuses the independent directors and RBS of trying to "prevent any transaction that would permit Messrs 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". Also it claims that RBS acted in a "grand conspiracy".
They stand to lose more than £144m in loans they made to the club if the sale to NESV goes through and will now also have to pay legal costs estimated at between £250,000 and £500,000.
As stated in the high court this week, and accepted by the judge, Broughton led an extensive sale process that whittled down 130 expressions of interest to two serious offers. But Hicks and Gillett claim he was guilty of rejecting a number of higher offers, including one from FBR Capital Markets for between £375m and £400m, and leaking details to the media to undermine their attempts to refinance.
The claim will be greeted with fury by fans who earlier in the day were celebrating a high-court judgment that found in favour of RBS, owed the majority of a £237m loan due for repayment tomorrow, and ordered the Liverpool board to be reconstituted so the sale to NESV could proceed.
Even as their board meeting continued in central London late into the night, Liverpool resolved to complete the sale to NESV, whose principal founder, John W Henry, was present. It is understood that Hicks' lawyers believe that RBS directors, Broughton and the other Liverpool directors will not want to risk being in contempt of a US district court by contravening the order, given their extensive interests in the country. The petition also points out that Broughton held meetings with Hicks in Texas.
Mr Justice Floyd had earlier upheld the claim by RBS for breach of contract against Hicks and Gillett after they attempted to block the sale last week by dissolving the board, contravening an agreement signed as a condition of refinancing last Aprilthat also led to the appointment of Broughton. The QC representing Hicks and Gillett had said in court that the pair accepted their time as owners of Liverpool had come to an end but that they believed the club was worth more than it was being sold for.
Ruling that their actions in seeking to block the deal represented "the clearest possible breach" of a corporate governance agreement signed with RBS in April as a condition of refinancing, Mr Justice Floyd ordered Hicks and Gillett to allow the club's board to be reconstituted in its original form by 8pm last night.
NESV yesterday reiterated that it had a "binding agreement" and was ready to "move quickly" to complete. It has promised to provide £200m to clear the existing acquisition debt and another £100m in working capital. But the Boston Red Sox owner is also named in the complaint. Tom Werner, NESV's chairman who has a background as a senior US media executive, was also yesterday flying to the UK in the hope of concluding the deal.
But the added delay could bring the spectre of administration back into play and the possibility of a nine-point penalty being imposed by the Premier League. The court date of 25 October is more than a week after the RBS loans are due.