RPOOL owners Tom Hicks and George Gillett last night dramatically halted the sale of the club at the 11th hour by obtaining a temporary restraining order from a Texan court over what they called an “epic swindle”.
In the same lawsuit Hicks and Gillett also claimed damages of more than £1bn from the rest of the club’s board, would-be buyers New England Sports Ventures and the Royal Bank of Scotland.
The audacious last-ditch move came as Liverpool’s board met in London to ratify a £300m sale to NESV, whose frontman John Henry attended, hours after a High Court judgement emphatically upheld their right to push ahead despite the objections of Hicks and Gillett.
Liverpool last night called the owners’ action “unwarranted and damaging” and vowed to overturn it “as swiftly as possible”.
A top sports lawyer questioned the move. Graham Shear, a partner at Berwin Leighton Paisner, told City A.M.: “It is hard to understand how a court there could have any jurisdiction over the constitution of the board of an English company, English legal agreements and/or company law here.”
In the short-term, however, Hicks and Gillett’s actions prevented the completion of a sale that looked inevitable from the moment Mr Justice Floyd announced his verdict yesterday morning. A court hearing in Texas is scheduled for 25 October, although Liverpool and RBS, the owners’ major creditors, are likely to seek a way to proceed before then.
The Americans’ request for a restraining order accuses Liverpool’s board, led by chairman Martin Broughton, and RBS of conspiring to sell to NESV at a price they knew to be far below its true market value. Hicks and Gillett had hoped to sell for closer to £600m.
They argue that three other bidders, including American investment bank FBR Capital Markets, whose offer had not previously been fully disclosed, had made bids of greater value than that of NESV, owners of baseball’s Boston Red Sox. By rejecting these, they say, they will suffer a loss. Hicks and Gillett stand to lose around £100m if the NESV deal is completed.
A statement from Hicks read: “The owners of Liverpool Football Club today reported that a Texas State District Court has granted a temporary restraining order (TRO) enjoining the Board of Liverpool Football Club (LFC) from executing a sale of the Club to New England Sports Ventures (NESV). The court set a hearing date of October 25, 2010. The TRO request, signed by Judge Jim Jordan of the 160th District Court in Dallas, was part of a lawsuit filed today by the owners of LFC against Royal Bank of Scotland (RBS), Martin Broughton, Christian Purslow, Ian Ayre, NESV and Philip Nash. The lawsuit also seeks temporary and permanent injunctions, and damages totalling approximately $1.6 billion (over £1 billion).”