Kop bosses in last stand to cut losses
Liverpool's immediate fate could be decided this morning when Mr Justice Floyd delivers his judgment on the legality of the proposed sale to New England Sports Ventures (NESV), but his verdict will not end the litigation surrounding England's most decorated club.
An appeal, and a series of potential damages claims, seem certain to follow after a revealing day in court saw two potential alternative buyers claim to have increased their offers, and Tom Hicks and George Gillett launch a counter-action against Royal Bank of Scotland (RBS) and the club.
It also emerged that the NESV deal has to be completed by November 1, with a declaratory judgment from the courts approving the sale, or either party can walk away.
After five-and-a-half hour hearing at the High Court, Mr Justice Floyd reserved judgment, but the case seems certain to run beyond Friday's deadline for Hicks and Gillett to repay £245m of loans to RBS.
Whoever loses the case is certain to appeal, ensuring that the case will run on into next week. Hicks and Gillett have also launched their own counter-suit against RBS and the board, while Broughton (below) and the club have begun proceedings for a separate declaratory judgment approving the sale to NESV. Meanwhile the three potential buyers, NESV, Peter Lim and Mill Financial, all threatened to sue for damages if their ambition to control Liverpool is frustrated.
RBS brought yesterday's action, claiming that Hicks and Gillett breached contractual undertakings made as a condition of their financing when they attempting to block the proposed sale to NESV by sacking members of the board.
Accusing Hicks of "breathtaking arrogance", Richard Snowden QC, acting for RBS, told the court: "This was a calculated breach of contract without consideration of RBS, in order to frustrate the sale process necessary to repay the bank's £200m by Friday."
Hicks and Gillett have admitted the breach of contract, but said they acted because the club board, chaired by Martin Broughton, and RBS had failed to achieve the best possible price for the club.
Demanding that the club board be reconstituted to include Hicks and Gillett's representatives instead of English non-owner directors Ian Ayre and Christian Purslow, barrister Paul Girolami QC said: "They (Hicks and Gillett) are not intent on stopping the sale. But the English directors have rushed forward with NESV without properly considering the alternatives."
In a piece of brinkmanship in keeping with Hicks' and Gillett's management of Liverpool, he also insisted that they were not attempting to stop the bank exercising its right to put the club into administration.
Girolami said that two offers remain in play, from Lim and Mill Financial, the US hedge fund that now controls George Gillett's 50pc stake in the club as a result of his default on a loan secured against it.
Lim, a Singapore-based stockbroker who until Monday night believed he was was the preferred bidder, yesterday upped his offer in a press release issued as the court proceedings began.
He claimed to have upped his offer to £320m, and demanded to know why he was not given the chance to compete with the NESV bid last Tuesday. He has demanded full disclosure of the board's deliberations last week, and suggested his confidentiality may have been breached.
Girolami said Mill Financial, understood to be acting in concert with Hicks, have offered to clear RBS loans of £245m and a further £100m to help fund the new stadium development. He said they had a meeting scheduled with Broughton last Thursday which was cancelled in the light of the deal with NESV.
Snowden and Lord Grabiner QC, acting for the club, dismissed both the offers as irrelevant. They claimed that Lim's offer was not the one he tabled last week and should be ignored, while Mill had insisted on exclusive negotiating rights which the board were unwilling to grant.
Despite these assertions, the emergence of Lim's improved offer may make life difficult for the board. Should the judge rule in RBS's favour, Broughton intends to schedule a board meeting tomorrow at which he intends to approve the NESV deal.
Should Hicks and Gillett choose to take part, they may wish to press the claims of counter offers that they will argue offer them a better price for an asset they still own.
NESV insisted that it would defend its deal with the club and could sue for "tens of millions in damages" should it collapse through administration, the board deciding to sell to another bidder, or Hicks and Gillett being granted an injunction to prevent the sale.
"These could result in very substantial damages running into tens of millions of pounds," said David Chivers QC, acting for NESV. (© Daily Telegraph, London)