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Page last updated at 21:40 GMT, Wednesday, 13 October 2010 22:40 UK

Liverpool sale 'blocked by injunction'

Tom Hicks (left) and George Gillett
Hicks and Gillett described the proposed sale as "an epic swindle"

A Texas court has granted a temporary restraining order stopping the sale of Liverpool Football Club, owners Tom Hicks and George Gillett have claimed.

It comes hours after the American pair saw their challenge against the club's sale thrown out by the High Court.

Hicks and Gillett issued a statement as the Liverpool board met to ratify the sale to New England Sports Ventures.

In reply, the board vowed to "move as swiftly as possible to seek to have it [the restraining order] removed".

The club's statement continued: "Following the successful conclusion of High Court proceedings, the board of directors of Kop Football and Kop Holdings met and resolved to complete the sale of Liverpool FC to New England Sports Ventures.

"Regrettably, Thomas Hicks and George Gillett obtained a Temporary Restraining Order from a Texas District Court against the independent directors, Royal Bank of Scotland PLC and NESV, to prevent the transaction being completed.

18 League titles
5 European Cups
7 FA Cups
7 League Cups
3 Uefa Cups
Turnover: £159.1m (2008)
TV revenue £74.5m (08-09)
Debt: £280m
Club valued at £300m-600m

"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."

BBC Sports editor David Bond, commenting on a statement that described the proposed £300m sale as an "epic swindle", said: "What's extraordinary about this petition is the language which is used.

"The board will reconvene and take legal advice. They can't ignore this Texas petition even though it doesn't have any particular jurisdiction in the UK.

"But the question is - and this is Hicks and Gillett's big gamble - will the buying consortium's leader John Henry be willing to wait around while they go through the latest legal wrangling to see if they can push ahead with that deal?"

Having gained the injunction from the Dallas court, Hicks and Gillett revealed they are seeking more than £1bn in damages.

The pair claim the injunction prevents Liverpool executing the sale of the club to NESV, with a hearing date set for 25 October.

The legal action in Texas - signed by Judge Jim Jordan of the 160th District Court in Dallas - is "part of a lawsuit filed against Royal Bank of Scotland (RBS), Martin Broughton, Christian Purslow, Ian Ayre, NESV and Philip Nash" read a statement.

"The lawsuit also seeks temporary and permanent injunctions, and damages totalling approximately $1.6 billion (more than £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."

However Tom Cruise, an expert in litigation at the Texas branch of US law firm Baker and Hostetler, suggested that the injunction would only give the club's American owners a temporary reprieve.

BBC sports editor David Bond

"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 BBC 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 London."

Hicks and Gillett's statement, posted on the American duo's behalf by international law firm Fish & Richardson, went on to allege that there had been a conspiracy to "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 it is RBS who receive the brunt of blame, the statement continuing: "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."

In addition to these claims, there are several allusions to bidders and investors who were interested in buying into Liverpool who had previously not been made public.

NESV's bid is worth £300m, while rival investor Peter Lim yesterday upped his own offer to £320m - while the legal notice claims another party made contact through a third party on 4 October and was offering up to £400m.

It is the latest twist in the long-running ownership battle at Anfield, one that looked like nearing an end when the High Court ruled against Hicks and Gillett on Wednesday.

The unpopular American pair had attempted to oust the boardroom rivals that had sanctioned the sale of the club to NESV, but saw their case ruled against by Mr Justice Floyd.

Speaking as he left the High Court, Broughton said: "I am absolutely elated, it's a very important day for our club. This will clear the way for the sale, we will have a board meeting this evening and proceed with the sale.

Liverpool fans at the High Court

"It has been an anxious time but we have been confident. But when you go to court you can never be sure."

"The board has to be reconstituted and I can't prejudge what the board is going to say. It would be inappropriate to prejudge what the board may say.

"But the club's going to have a great future. We will re-establish the right basis for the club. The acquisition debt that has been plaguing us will be gone, we have a great future. We will get the right owners for the fans."

John W Henry, who heads the NESV consortium, celebrated the High Court verdict through his Twitter account and praised Broughton managing director Christian Purslow and commercial director Ian Ayre.

Henry wrote: "Well done Martin, Christian & Ian. Well done RBS. Well done supporters!"

NESV said in a statement that it had a "binding agreement in place with the Board of Liverpool FC".

It went on: "We are ready to move quickly and help create the stability and certainty which the club needs at this time. It is time to return the focus to the club itself and performances on the pitch."

NESV is thought to be offering about £300m for the club, enough to pay back the £240m of loans and £40m of fees owed to Royal Bank of Scotland. Its bid has been accepted in principle by the club.

In recent days, however, another bid materialised, with Singapore billionaire Peter Lim offering £320m in cash for the club and its liabilities. He is also willing to provide £40m in cash to buy players.

Following Wednesday's ruling, Lim issued a statement outlining his plans.

"I welcome the decision of the court," it read. "I hope that when the board is reconstituted tonight that it will not simply ratify a sale to NESV but will consider all the offers before them.

"I have delivered my offer to the board and believe that my ownership represents the best option for the future of the club and its supporters."


American hedge fund Mill Financial has a bid that also pledges to wipe out Liverpool's debts while providing up to £100m to fund a new stadium.

Mill Financial technically controls Gillett's 50% stake after he defaulted on the loan used by the American to fund his part of the leveraged takeover in 2007.

Hicks and Gillett were also warned by Mr Justice Floyd it would be "inappropriate in the circumstances" for them to be granted the right to appeal the High Court's decision.

Keith Oliver, a solicitor acting for Hicks and Gillett, stated: "We are obviously disappointed. Mr Hicks and Mr Gillett will now be considering their next steps and that will include whether to make an application to the Court of Appeal."

On Tuesday, the judge heard how Hicks had tried to block the sale to NESV last week by removing Purslow and Ayre from the board.

He had then installed his son, Mack, and business associate Lori McCutcheon so he would have control of voting on the board.

But this was in breach of agreements the Americans had signed with the bank when RBS extended its credit facilities.

The RBS loan facility ends on Friday and the bank had applied to the court for the injunction to allow the sale to go ahead and recoup its money.

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see also
Liverpool FC gets new 320m offer
12 Oct 10 |  Business
Liverpool confident over takeover
13 Oct 10 |  Liverpool
League approves Anfield takeover
08 Oct 10 |  Liverpool
Hicks set to fight Liverpool sale
07 Oct 10 |  Liverpool
Liverpool 'to shed debts' in deal
06 Oct 10 |  Liverpool
Red Sox owners to buy Liverpool
06 Oct 10 |  Liverpool
Hodgson named new Liverpool boss
01 Jul 10 |  Liverpool

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