Liverpool chairman confident as club go to court
Liverpool chairman Martin Broughton is confident that a deal with New England Sports Ventures (NESV) for the Premier League club will remain intact after a court hearing on Tuesday.
London: Liverpool chairman Martin Broughton is confident that a deal with New England Sports Ventures (NESV) for the Premier League club will remain intact after a court hearing on Tuesday.
The beleaguered Merseyside club, whose protracted sale has dominated headlines since they were put on the market in April, will attend the High Court in London when Broughton’s power to agree to the sale of the club will be examined.
Much-criticised American owners Tom Hicks and George Gillett, who stand to lose some 140 million pounds (USD 223.1 million) if the deal goes through, will argue that Broughton does not have such power, potentially leaving the club without a buyer and reigniting the danger of administration and a nine-point penalty in the league.
Sources close to the deal said that British Airways chairman Broughton, who joined Liverpool in April to work alongside Barclays Capital in finding a buyer, believes he does hold the right to sell and that the deal will be ratified.
The hearing will start after 0930 GMT, a spokesperson for the court said on Monday.
The board’s handling of previous refinancing proposals by the owners is also likely to come up, as Liverpool face an imminent deadline for a refinancing which could have a greater impact on the future than the court case.
Liverpool’s board agreed to sell England’s most successful soccer team to the owners of baseball’s Boston Red Sox for 300 million pounds last week -- a deal which has the support of the club’s major creditor Royal Bank of Scotland (RBS) but, according to Hicks and Gillett, vastly undervalues the club.
The proposed deal includes 200 million pounds in cash to repay all acquisition debt and taking on additional working capital debts and other liabilities.
If Broughton’s legal advice is correct Liverpool fans can expect the sale to go through quickly, though Hicks and Gillett could appeal, and the Oct. 15 loan repayment deadline RBS put in place would be met.
If the court decides in favour of the American duo, the club would again find themselves in a race to find suitable owners but this time with just days to spare before RBS could call in their debts and administration proceedings began.
According to media reports in Britain on Monday, Peter Lim, the Singapore billionaire who lost out to NESV in bidding for Liverpool, would make a renewed attempt to buy the club in such circumstances.
NESV, headed by Red Sox owner John W. Henry, have already indicated that they would look to renegotiate a deal or walk away from the Anfield club if administration happened.
Either way, Hicks and Gillett stand to lose out financially on a club they bought in February 2007 for 218.9 million pounds and have since burdened with debt.
RBS is unlikely to want Liverpool to enter into administration as the process would jeopardise it recouping the money owed and a new deadline could be agreed.
A nine-point penalty, for a club already struggling in 18th place in the 20-strong league, would also harm its value.
The bank, majority owned by the UK taxpayer, said in a statement on Monday that it had “sought and obtained” an injunction against Hicks and Gillett in light of a purported breach of contract which saw the owners try to remove two board members and scupper the bid last week.
“Among other things, that interim injunction prevents Mr. Hicks or Mr. Gillett taking any steps to remove or replace Mr. Broughton from his position as chairman of the board of the Kop companies or from taking any other steps to appoint or remove any directors from the board of the Kop companies,” the statement said.
RBS added that Tuesday’s court case relates to a breach of contract only and does “not represent steps by RBS to enforce its security or to appoint an administrator”.