Battle for Liverpool goes into extra-time after day in court

Posted Friday, October 15, 2010 by theguardian.com

• NESV race to complete deal after high court ruling
• Judge tells Hicks and Gillett to withdraw injunction

Battle for Liverpool goes into extra-time after day in court
Liverpool for sale: An estate agent's board in the garden near Anfield

Liverpool's prospective new owners were (14th, Oct.) scrambling to push through a deal that would end the tenure of Tom Hicks and George Gillett before this weekend's Merseyside derby following another dramatic day of court action on both sides of the Atlantic.

New England Sports Ventures' lawyers, increasingly confident that a deal could be completed by Friday night, were pursuing a twin-track approach as they raced against the clock to get the £300m deal sealed. The Boston Red Sox owners today moved a decisive step closer to taking control when a high court judge condemned Hicks and Gillett for obtaining a restraining order in a Dallas court, ordering them to withdraw the US petition blocking the sale by tomorrow afternoon.

NESV believed that, if it could get time before the Dallas judge who dramatically issued the restraining order last night and present him with the judgment of the UK court, he could throw it out and allow the sale to complete tomorrow. If that happens, the principal owner John W Henry, who tonight returned to the central London offices of Liverpool's lawyers Slaughter & May, would take over in time to attend Sunday's match at Goodison as the club's new owner.

But, if forced to rely on Hicks and Gillett going to court by 4pm tomorrow to withdraw the petition, the deadline set by Mr Justice Floyd, the paperwork would not be complete in time for the weekend. If Hicks and Gillett do not comply with the order, they will be in contempt of court, a serious offence that can carry a prison sentence.

It emerged today that the Liverpool board had all but agreed the sale of the club to NESV at a tempestuous meeting last night, at which Hicks and Gillett revealed they had served an injunction blocking the deal that accused RBS and the Liverpool directors of a "grand conspiracy".

Even as they failed to defend their position in the high court this, lawyers representing the pair were filing a motion in Dallas accusing the Liverpool directors and other advisers of contempt of court in the US for holding last night's board meeting, which they claimed was a contravention of the restraining order. The Texas court last night adjourned its proceedings until 1pm BST today.

Tomorrow's date is significant because 15 October is when the £237m owed to RBS and Wells Fargo is due to be called in, although in practice the bank has been able to do so for some time and would be likely to extend the loans until Monday.

It is believed the paperwork and funds are in place for the sale to proceed and NESV's brief, David Chivers, referred to them throughout today's hearing as "the new owners". "The [former] owners, from beyond the grave, are seeking to exercise with their dead hand a continuing grip on this company. That is simply not acceptable," he said.

NESV's hand was strengthened when the Singaporean billionaire Peter Lim withdrew from the process. "It has become clear to me that the board is intent on selling the club to New England Sports Ventures to the exclusion of all other parties, regardless of the merits of their bids," Lim said.

It emerged in the high court that both Lim's bid and one from Mill Financial had been discussed yesterday but the reconstituted board voted 3-2 to accept the NESV offer, with Hicks and Gillett voting against.

Hicks was today forced to deny that he had sold his shares to Mill Financial, following rumours that the hedge fund that already holds Gillett's stake after he defaulted on a loan had acquired it.

The dramatic attempt by Hicks and Gillett to postpone the sale and claim $1.6bn in damages looked to have collapsed when Floyd today accused them of withholding the full extent of their similar claim to the high court, which was rejected, and said their actions were "on the face of it, unconscionable".

"I take RBS's point that this case has no real connection with Texas. They are right that the commencement of proceedings in the Texan court is an attempt by the owners to depose them of their gains so far in English litigation."

Solicitors for Hicks and Gillett failed to turn up at the high court, where the pair were accused of the "most outrageous abuse of process" and making "scurrilous allegations" by Richard Snowden QC, acting for RBS. Their allegations that they were the victims of an "epic swindle" and "grand conspiracy" to sell the club below its market price were "wild and scurrilous" with no evidence to support them, Snowden said.

Suggestions that RBS was using its reputation to prevent any transaction that would permit Hicks and Gillett to recover any of their initial investment in the club was "absolute poppycock".

Lord Grabiner QC, representing Kop Football and Kop Holdings, said there was no way the firms could be included as plaintiffs because the board, led by the independent chairman, Martin Broughton, had not approved it. "We say the proceedings brought in Dallas are abusive, vexatious and oppressive." He claimed that their version of the proceedings in London, restricted to one paragraph in a 28-page petition, was a "grotesque parody" that failed to mention they had already lost a bid to secure an injunction in the UK.

"They concealed the fact because they are now anxious to secure for themselves a second bite of the cherry from that famous jurisdiction,the Dallas county court. If it were not such a serious matter, it would be a joke," he said.

Broughton, the chief executive Christian Purslow and the commercial director Ian Ayre – the three independent directors on the board that voted for the NESV deal – said tonight they were "delighted" with the verdict. "We are glad to have taken another important step towards completing the sale process," they added.