Two bids tabled for Liverpool FC

0.15pm: Owen Gibson has passed on the following report about the latest classy move by Hicks & Gillett. It's a long read, but it's worth it.

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 totaling approximately $1.6 billion (over £1 billion).

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 (and well below Forbes magazine's recent independent $822 million valuation of the club) - and below multiple expressions of interest and offers to buy either the club in its entirety or make minority investments (including Meriton and Mill Financial). It describes how 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.

The Club's owners are represented by attorneys from the international law firm of Fish & Richardson.

The following are some of the key points in the complaint, which details the roles of RBS and the other defendants, and also describes previously undisclosed offers to purchase LFC:

"The Director Defendants were acting merely as pawns of RBS, wholly abdicating the fiduciary responsibilities that they owed in the sale."

"RBS has been complicit in this scheme with the Director Defendants. For example, in letters from RBS to potential investors obtained just within the past few days, RBS has informed investors that it will approve of a deal only if there is "no economic return to equity" for Messrs. Hicks and Gillett. In furtherance of this grand conspiracy, on information and belief, RBS has improperly used its influence as the club's creditor and as a worldwide banking leader to prevent any transaction that would permit Messrs. Hicks and Gillett to recover any of their initial investment in the club, much less share in the substantial appreciation in the value of Liverpool FC that their investments have created."

"On or about October 4, 2010, Mr. Hicks received a letter of interest from a third potential purchaser represented by FBR Capital Markets ("FBR"), offering to purchase Liverpool FC for £375 to £400 million ($595 to $635 million). The letter informed Mr. Hicks that the potential purchaser would not need financing, possessed the funds to close the transaction, and intended to build a new stadium for Liverpool FC."

"Additionally, the Plaintiffs learned just days ago about another potential investor that made a similar offer in the £350 to £400 million range that was communicated to Defendant Broughton and another unnamed co-conspirator in late August. According to this investor, Mr. Broughton never responded to the offer. Moreover, when the purported sale to NESV was announced, this investor again contacted Mr. Broughton and informed him that the offer, which significantly exceeded the NESV offer, was still on the table. Again, Mr. Broughton brushed this offer aside without further discussion."

looks like a geocities or angelfire website

ow in the fuck can this possibly stand? This court hasn't got jurisdiction outside of Texas let alone the United States!

He's a lying fucking weasel. This bullshit about "FBR Capital Markets" making an offer much higher than NESV, why wasn't it mentioned in court yesterday then?


I can't honestly see how a county court in Texas can possibly overrule the High Courts in the UK.

Texas is fuck.. don't forget George DUBYA Bush is from those parts..

how much better would you have slept if you'd put your head down at 10pm and missed all this?

and tom hicks is a friend and substantial campaign donor to THE MIGHTY W

as for the question about a yank courts jurisdiction, according to this theres an american company that ultimately owns the various holding companies that own this toxic asset.

www.liverpool-kop.com/2010/10/exclusive-hg-and-144m-lfc-loans-how.html

also from elsewhere:

I suspect H&C are filing suit pursuant to Texas's long arm statutes. Long arm statutes in the United States grants a state jurisdiction over what is essentially a foreign (out of state) matter.

The beauty of these long arm statutes is that they allow Texas courts to hear a case against a party and enter a binding judgment against the losing party that resides outside Texas. However, such ability to hear and enter binding judgment must be based on some action or injury that involves or concerns Texas laws.

Although I'm not familiar with Texas law, I looked up their long arm statute and it says that a non resident would be deemed to have done business in Texas (and presumably could be haled to Texas courts) if such non resident:

(1) contracts by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part in this state;
(2) commits a tort in whole or in part in this state; or
(3) recruits Texas residents, directly or through an intermediary located in this state, for employment inside or outside this state.

Thus, there could be some basis for jurisdiction if: (1) either H or G are Texas residents and RBS's loan contract, for example, is to be performed wholly or partly in Texas; (2) if H & G can show that the defendants committed some sort of tort in Texas; or (3) the defendants recruited any Texas residents involved in this suit either in Texas or outside.

I can see lots of ways that H&G could argue long arm jursidiction based on (1) and (3) above. Whether it will eventually stand up in court is another question.

Liverpool will return to the High Court in TCOTU on Thursday in the battle to determine the future of the club.

The Reds were close to being sold to New England Sports Ventures after co-owners Tom Hicks and George Gillett failed to win back control of the club.

But the sale to NESV was dramatically halted by an injunction granted to Hicks and Gillett by a court in Texas.

Now the Liverpool board will head to the Royal Courts of Justice again in a bid to overturn that decision.

A sale is required so that the club's main creditor, Royal Bank of Scotland, can recoup £200m in loans.

The bank has already threatened to place the club into administration if new owners were not found before a 15 October deadline.

The threat of administration and the nine-point penalty that would accompany it appeared to have passed on Wednesday when Hicks and Gillett's opposition to the sale was dismissed by the High Court.

But the Americans' subsequent injunction muddied the waters once more.

At the heart of their tactics is a belief that the club is being undersold. They value it at £600m and would lose about £140m if NESV's deal, worth half that amount, went through.

Hicks and Gillett have claimed that rival bids were not given due consideration by Liverpool chairman Martin Broughton, chief executive Christian Purslow and commercial director Ian Ayre.

It now appears that one of those bids - from Mill Financial - could emerge as a serious contender.

NESV's deal seemed to be legally binding but sources suggest that Mill Financial has acquired Hicks's shares, having already taken Gillett's holding when he defaulted on a loan payment.

With the hedge fund also believed to have bought Wells Fargo's 25% debt stake in Liverpool, it could now be in pole position to force through a deal.

Radio 5 live's Brian Alexander believes Mill Financial lead the way.

"It looks to me as if Mill Financial - the hedge fund owned by Dwight Schar - have now edged ahead in a three-horse race," he said.

"If they repay the £200m to RBS, it puts Mill very much in the driving seat and as a result of that the deal with NESV and John Henry would collapse."

Alexander added that Mill Financial's bid valued the club at about £350m, higher than the valuations of NESV and Singapore businessman Peter Lim, who is the third interested party.

Mill Financial have also expressed a commitment to build a new stadium.

NESV's bid, fronted by John Henry, could instead lead to a redevelopment of Liverpool's Anfield stadium, the group having taken a similar stance when taking control of baseball side Boston Red Sox and then renovating their Fenway Park ground.

Henry might have expected to be making those sort of key logistical decisions this week having won the High Court battle, but BBC Sport understands that the further delay in determining the club's future has not put him off the planned purchase.

"He is prepared to wait," said BBC sports editor David Bond. "Sources tell me he has binding agreements."

Prior to the emergence of Mill Financial as a serious contender on Thursday, it had appeared the injunction granted in Texas would merely delay a sale to NESV.

Tom Cruise, an expert in litigation at the Texas branch of US law firm Baker and Hostetler, suggested it was only a temporary reprieve for the current owners.

"It appears this was a little bit of a Texas ambush but it's subject to immediate review [by the judge who granted the injunction] and then if this judge attempts to restrain the sale a court of appeal in Texas could review the sale as well," he told Radio 5 live.

"A temporary restraining order under Texas law is an emergency measure where life or liberty is at issue and that's why it has to expire within 14 days.

"More importantly, Texas law requires that security be posted and the whopping amount of $15,000 dollars was placed in the court and I don't think that's quite enough to secure RBS's £237m loan.

"The judge said that he based his ruling solely on the unsubstantiated allegations of Hicks and Gillett, but the buyers will have their day in court to present their evidence and, even in Texas, courts will respect the ruling of a High Court in TCOTU."

Hicks and Gillett's petition to the Texan court, which described the sale of Liverpool as an "epic swindle", also laid out a claim for more than £1bn in damages.

And it was RBS which received the brunt of blame from the American duo, the petition adding: "The director defendants were acting merely as pawns of RBS, wholly abdicating the fiduciary responsibilities that they owed in the sale.

"RBS has been complicit in this scheme with the director defendants."

The Liverpool board have vowed to move quickly to have the restraining order removed.

"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," read a statement.

They will attempt to achieve their objective later on Thursday.

please let liverpool be owned by a hedge fund. grant me this merciful ALLAH

it's not true anyway, your good friend Robert Peston was talking shite.

"Reports this morning suggested the hedge fund, a branch of Washington-based Springfield Financial, had acquired the Texan's 50% share having already taken ownership of his fellow co-owner George Gillett's half.
However, a UK-based spokesman for Tom Hicks told Press Association Sport Mill Financial had not acquired Hicks' shares. "

High Court grants an injunction against Hicks & Gillett's injunction. Whatever that actually means, it's certainly good news though.


This expert opinion from Mark Stephens, sports lawyer and international litigator at Finers Stephens Innocent:

The application for a TRO (injunction) in a Texas City court is one last, desperate, throw of the dice for Gillett & Hicks reveals how bankrupt their legal position is...basic principles of international law are (1) that an injunction issued by a Texas Court has no effect on actions in this (the UK) country; and, (2) that the court first dealing with the case should be the only court dealing with the matter to the end. Therefore, the Texas court will have to relinquish control to the High Court in TCOTU...if Hicks and Gilett really wanted to stop this transaction they needed an injunction from the High Court in TCOTU and another against New England Sports Ventures in Boston where that company is located.

I confidently predict that RBS and the Directors will be able to shrug off this irksome litigation which seems calculated to delay the takeover which will ultimately be consumated.

If they don't comply by 4pm BST tomorrow they'll be in contempt of UK court and could face prison.

NESV and Hicks are in court tomorrow at 7am local time (1pm BST) and the hearing should take less than an hour, i'm fully confident that by tomorrow night NESV will have completed the takeover.

news.bbc.co.uk/sport1/hi/football/teams/l/liverpool/9094283.stm

sad day. the dream is over for now.

oh well we can still laugh at how ridiculous Liverpool are on the pitch now this hilarious episode is over.

Done deal. Thank fuck for that.

DON

Yeah slightly premature.

Look at that fucking cigar! Of course he's a don!