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Sports

Liverpool owners gain restraining order to stop sale of club

Text by News Wires

Latest update : 2010-10-14

The fight for the Liverpool football team was taken to a Texas state court on Wednesday in the ongoing bitter fight between the current American owners who are trying to stop the venerated club from being sold to the owners of the Boston Red Sox.

AP - The trans-Atlantic fight for the famed but struggling Liverpool soccer team spilled into Texas state court on Wednesday when its current American owners obtained a temporary restraining order preventing the club from being sold to the parent company of the Boston Red Sox.

The current owners called the Liverpool-Red Sox deal an “epic swindle.”
 
Earlier in the day, the High Court in London refused to stop the team’s independent directors from selling the team out from under owners Tom Hicks and George Gillett Jr. at a huge loss to the pair, who bought Liverpool three years ago.
 
Debts and liabilities resulting from that leveraged buyout have grown to around $453 million, which is owed to Royal Bank of Scotland and Wells Fargo by Friday.
 
The owners ceded control of the sales process last spring to an appointee of RBS, who became Liverpool’s chairman and negotiated the sale to New England Sports Ventures.
 
Given that London court decision, the team’s board convened a meeting in London on Wednesday night to approve the deal, and Red Sox owner John Henry had just arrived when the District Court in Dallas issued the temporary restraining order and scheduled an Oct. 25 hearing.
 
The board was informed of the injunction by the owners in a teleconference. But a few hours later, the board resolved to complete the sale, despite accepting that the temporary order was enough to “prevent the transaction being complete.”
 
Whether the Texas court order can be enforced on events in Britain, in a transaction with holding companies from Delaware, Britain and the Cayman Islands, was not immediately clear. The board said it will seek to remove the TRO issued by Texas District Judge Jim Jordan.
 
Hicks and Gillett sued the three British board members, RBS and NESV for $1.6 billion in damages.
 
The move came hours after High Court Judge Christopher Floyd in London ruled against the owners’ attempts to try to block it.
 
Hicks owned the Texas Rangers before the team went bankrupt this year and was sold in August for $590 million to a group headed by Hall of Fame pitcher Nolan Ryan. Hicks also is trying to sell the NHL’s Dallas Stars.
 
Gillett owned the NHL’s Montreal Canadiens before selling them in December to the Molson family along with the team’s arena and a concert promotion company in a deal said to be worth $575 million.
 
Hicks and Gillett bought Liverpool in 2007 for $431 million. They said they have invested an additional $270 million in cash into the club since then.
 
“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 team said.
 
The Dallas suit was filed against Liverpool chairman Martin Broughton, managing director Christian Purslow, commercial director Ian Ayre, RBS and NESV. Action is also being taken against Liverpool finance director Philip Nash, who isn’t on the board.
 
“The suit lays out the defendants’ ‘epic swindle’ in which they conspired to devise and execute a scheme to sell LFC to NESV at a price they know to be hundreds of millions of dollars below true market value,” a statement issued by Hicks’ and Gillett’s public relations team said.
 
The statement said the Liverpool board ignored other more lucrative offers and that “the defendants excluded the owners from meetings, discussions and communications regarding the potential sale to NESV and interfered with efforts by the owners to obtain financing for Liverpool FC.”
 
Two others bids emerged this week - one from Singapore businessman Peter
 
Lim and another from the American hedge fund Mill Financial. Wednesday’s statement said there was also a bid from FBR Capital Markets for between $595 million to $635 million.

Date created : 2010-10-14

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