Tom Hicks and George Gillett admitted yesterday that the ending of their ownership of Liverpool is imminent but made a defiant last attempt to cut their losses ahead of their day of judgement at the High Court today.
The Americans threw in every last argument available to them, in Court 16 of the High Court, as they sought to stall the decision of Liverpool's non-executive chairman Martin Broughton to accept the £300m bid for the club by New England Sports Ventures (NESV), which will force them out of Anfield with £144m losses. They claimed that two more lucrative alternative bids were still "active"; that Liverpool's non-American directors have marginalised them by engaging in a secretive search for new owners; and that a "sub-committee" of the club board which opted for the bid did not have the legal right to do so.
In the same courtroom at 10.30am today Mr Justice Floyd will rule whether the Americans, who were not in court for yesterday's four-and-a-half-hour hearing, breached signed undertakings to Royal Bank of Scotland (RBS) when they summarily suspended the managing director Christian Purslow and the commercial director Ian Ayre shortly before last Tuesday's meeting at which the NESV bid was voted through. The owners' lawyer, Paul Girolami QC, did not challenge that fact when RBS began proceedings based on the breach yesterday.
Girolami told Mr Justice Floyd that Broughton, Purslow and Ayre had "rushed" into a sale to NESV when Meriton Group, headed by Singapore's eighth wealthiest man, Peter Lim, and with representatives in court yesterday, had offered a financially superior deal. Lim, who has seized on the uncertainty of the past 24 hours, issued a dramatic statement while yesterday's case was unfolding to say he was ready to up his bid and spend £40m on players. His offer for the club now stands at £360m, £20 more than NESV's.
Mill Finance, the Pennsylvania-based finance company which is understood to have taken over Gillett's 50 per cent share of the club after he fell into default on the $75m loan it provided him to buy into the club, was the other prospective buyer cited by Girolami which said it was ready to write off Liverpool's debt and make a £100m commitment to finance a new stadium.
Strong evidence points to NESV's being the better offer. Broughton has always said the biggest offer is not the best. NESV has vastly more experience in running sports franchises while £100m for a stadium is a third of the projected cost of Liverpool's new Stanley Park stadium.
Girolami also argued that Friday's deadline for repayment to RBS of a £200m debt facility did not mean that RBS would put the club into administration – with the attendant nine-point deduction that could jeopardise the NESV deal – and that the significant deadline was 1 November, by which time Liverpool must take or leave the NESV deal.
The rest of the Hicks and Gillett case appeared to have been formulated on the hoof, with written notes passed to Girolami as he made the argument, not detailed in written legal submissions, that Hicks and Gillett had been "increasingly concerned" about the "us and them" culture that the English directors used to exclude them from sale talks. An email apparently sent in error from the finance director Philip Nash to Gillett referred to a "home team" discussing the Meriton deal, the inference being that the Americans were not in that "team". The Americans also argued that they had been excluded from last Tuesday's crucial meeting.
But Broughton's QC, Lord Grabiner, responded that the Americans knew exactly what was going on last Tuesday because their own lawyer, Bruce Toth, had remained on the conference call line to hear the NESV bid being voted through. The Americans were actually informed of Tuesday's meeting via an email from Broughton two days in advance, though Hicks and Gillett sought a one-week deferral. By then, they and Hicks' son, Mack, had agreed to the reconstitution of the board.
"Someone who is invited to a meeting says 'I don't want to come to your meeting because I've done something else which makes that meeting irrelevant,'" said Lord Grabiner. "That's ridiculous and unarguable." The "home team" was a term of reference to a conference call facility used by Liverpool.
Liverpool and RBS believe that the breach of the undertaking not to reconstitute the board and thus prevent a sale is the case's most critical point and Richard Snowden, RBS's barrister, accused the Americans of "breathtaking arrogance". He concluded: "It is quite astonishing for two businessmen who are owners of their company to say 'we don't care we owe [the bank] £200m on Friday. They can wait.'"
The case continues today.Reuse content