Liverpool owners to drop court case against sale

2010-10-15 14:02

London – Liverpool’s owners are withdrawing their Texas court order blocking the sale of the club but could still find a way to stop the proposed £300-million (about R3.3 billion) takeover by the owners of the Boston Red Sox.

Co-owners Tom Hicks and George Gillett Jr have decided to drop the temporary restraining order they obtained in Dallas to block the sale to New England Sports Ventures, their lawyer Keith Oliver said today.

British High Court judge Christopher Floyd had demanded the Texas case be dropped by 4pm London time, or Hicks and Gillett would be in contempt of court.

“Mr Hicks and Mr Gillett have an application to withdraw the temporary restraining order,” Oliver said. “The court convenes at 7am (Dallas time, 1pm in London) at which time the order will be made.”

Hicks and Gillett are determined to stop the team’s three independent directors from selling the team to NESV because they believe the price undervalues the 18-time English champions.

John Henry, the financier who heads NESV, indicated he fears a late intervention from American hedge fund Mill Financial could help Hicks and Gillett Jr prevent the sale.

“We have a binding contract,” Henry posted on Twitter.

“Will fight Mill Hicks Gillett attempt to keep club today. Their last desperate attempt to entrench their regime.”

Henry arrived later today at the London law firm where the English club directors were meeting.
Hicks could try to sell his share to Mill Financial, which could then pay off the debt owed to Royal Bank of Scotland.

However, the Premier League refused a request from Mill yesterday to be approved as “fit and proper” to own or become directors of Liverpool.

The league, which has already approved the prospective NESV takeover, told the Mill group that only Liverpool’s board can ask the league to approve a potential owner.

The board is determined to push through the NESV deal despite the owners’ opposition.

Mill Financial has technically already taken control of Gillett’s 50% stake after he defaulted on the loan used to fund his part of the leveraged takeover in 2007.

It was revealed in a high court hearing in London earlier this week that Mill Financial itself is interested in taking over the club, offering to repay more than £280 million of debt to Royal Bank of Scotland by Friday’s nominal deadline to meet those liabilities and penalty charges.

But NESV could go to the London High Court to enforce the binding agreement it has already signed with the three English board members who can outvote Hicks and Gillett 3-2.

“We are nearly there,” Liverpool chairperson Martin Broughton said late yesterday. “We still have to take away the restraining order. Mr Henry is (still) very committed.”

At a hearing in Dallas, NESV lawyers argued Liverpool was headed for default on its debt – and a possible nine-point penalty in the Premier League standings – if Texas
District Judge Jim Jordan didn’t decide by 10.01am London time today. Jordan resisted the urging of NESV attorneys to rule immediately on their request to lift the TRO.

In London, NESV lawyer David Chivers said the sale would go through once the Texas case is withdrawn.
“We are the owners (of Liverpool),” Chivers told the high court. “The owners from beyond the grave are seeking to exercise with their dead hand a continuing grip on this company.”

Amid the takeover turmoil, Liverpool, is currently mired in the relegation zone after its worst start to a league season since 1953.

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