The battle over the control of Liverpool Football Club will now go to the High Court. The hearing is most likely to take place next week, although it could happen as early and tomorrow. Tom Hicks and George Gillett could then appeal any judgement. One source close to the situation told the Financial Times that he expected a ‘blizzard of litigation’. The FT thinks that one consequence could be a higher offer than has been made so far.
The battle over the control of Liverpool Football Club will now go to the High Court. The hearing is most likely to take place next week, although it could happen as early and tomorrow. Tom Hicks and George Gillett could then appeal any judgement. One source close to the situation told the Financial Times that he expected a ‘blizzard of litigation’. The FT thinks that one consequence could be a higher offer than has been made so far.
However, if the case is not resolved by the deadline for the repayment of loans to Royal Bank of Scotland (RBS) next Friday, then Martin Broughton’s Plan B would come into operation. It is anticipated that RBS would put Liverpool’s holding company temporarily into administration, the club would not suffer a nine point deduction. The Premier League takes the view that these rules are designed to deal with insolvency which is not the situation here.
Company boards have a general duty to take care of the interests of their shareholders, in this case George Gillett and Tom Hicks. However, Martin Broughton and his coleleagues could make an argiment on the following lines. The company faces being taken over by RBS. Moreover, there are not the funds available to make the needed investment in the new stadium at Stanley Park. Hence, it is in the best interests of the company to sell it to a credible buyer. New England Capital Ventures is such a buyer and have a made a realistic offer. The price that the current owners is demanding is unrealistic.
Written undertakings extracted by Mr Broughton when he became chairman could be important. Mr Hicks and Mr Gillett granted the board the autonomy and authority to agree a sale. That was smart thinking by Mr Broughton.
I am not a company lawyer, but I would be surprised if Hicks and Gillett won in court. You would think they would walk away gracefully, but that is not their style. As far as they are concerned, they are determined to recoup £140m. The Financial Times described them as ‘desperate defenders of their own self-interest.’
It seems very likely that New England Capital Ventures will be the owners. Given the scepticism that has understandably been expressed by many Liverpool fans, it would be helpful if they issued a detailed statement of intent about their plans. However, they may feel unable to do that until the legal proceedings are completed.