RBS make Liverpool move ahead of court date

The Royal Bank of Scotland has obtained an injunction preventing Liverpool owners Tom Hicks and George Gillett from sacking independent chairman Martin Broughton or any other board members ahead of tomorrow's court case.

RBS is the club's main creditor, having lent Americans Hicks and Gillett the money to buy the club in March 2007, and is claiming in the High Court that the pair breached their agreement by trying to replace managing director Christian Purslow and commercial director Ian Ayres on the board last week.

The outcome of the case should decide Liverpool's immediate future, with the club's board having agreed to a £300million offer from New England Sports Venture, against the wishes of Hicks and Gillett.

RBS said in a statement: "RBS in its capacity as lender to the Kop group of companies received the benefit of various contractual undertakings from Mr Hicks and Mr Gillett in relation to the corporate governance arrangements that Mr Hicks and Mr Gillett agreed would apply to the Kop group of companies with effect from April 2010.

"Those undertakings provided for the appointment of Mr Broughton as chairman of the board and the appointment of the chief executive and commercial director of LFC to the Kop boards.

"As is well known Mr Hicks and Mr Gillett purported to make changes to those corporate governance arrangements on 4 October. This was in breach of those contractual undertakings.

"In light of that purported breach of contract RBS sought and obtained on Friday 8 October 2010 an interim injunction against Mr Hicks and Mr Gillett until a further hearing scheduled for tomorrow.

"Among other things, that interim injunction prevents Mr Hicks or Mr Gillett taking any steps to remove or replace Mr Broughton from his position as chairman of the board of the Kop companies or from taking any other steps to appoint or remove any directors from the board of the Kop companies."

It also emerged today that Liverpool's owners have been technically in default of their refinancing agreement for some time - despite the repayment deadline of Friday.

RBS have chosen, however, not to enforce that default position which would have led to Kop Holdings going into administration and risk Liverpool incurring a nine-point deduction from the Premier League.

That could still happen if Hicks and Gillett have not repaid their £280m debts by Friday's deadline.

The RBS statement added: "The proceedings tomorrow represent the continuation of Friday's proceedings and relates to breach of contract only. These proceedings do not represent steps by RBS to enforce its security or to appoint an administrator.

"We are unable to provide any visibility on timing for resolution of these proceedings at this stage."

Royal Bank of Scotland PLC v Hicks & others is among a number of applications to be heard by Mr Justice Floyd at 1030 in Court 18.

That signals the start of the process which may not be concluded tomorrow but should be by the end of the week.

The dispute to be settled revolves around whether chairman Broughton had the authority to sell the club against the wishes of Hicks and Gillett.

Broughton claims when the owners decided to put the club up for sale in April, RBS requested undertakings from them that only he, as independent chairman, could make changes to the club's board.

However, minutes before a meeting last week to discuss the bid by NESV, which will clear all debt but leave the owners with losses of £144million, Hicks tried to sack Purslow and Ayre and install his son, Mack, and Lori McCutcheon, who works for Hicks Holdings.

Broughton rejected the proposal and continued with the meeting, with the England-based board members coming down in favour of the NESV bid.

Hicks, however, has denied there are such undertakings in place, and insists Broughton's actions are illegal and therefore the sale is invalid.

As the issue of who has the necessary authority to agree a sale forms the crux of the legal argument, proof of the existence or not of those undertakings is likely to be pivotal.

Last week Broughton said Hicks and Gillett had "flagrantly abused" their undertakings to the bank.

"As part of my appointment, they gave specific undertakings to the Royal Bank of Scotland that said Martin Broughton was the only person authorised to make any board changes," he said.

"They basically flagrantly abused those two undertakings to RBS and removed Christian and Ian from the board and sent us details just before the board meeting saying they had been removed and appointing two others.

"We took legal advice and I determined that the action was invalid."

Broughton's argument, and that of the rest of the England-based members of the board, is that they have acted in the best interests of the club in agreeing a deal which relieves the huge burden of debt on Liverpool - who were responsible for paying £40m a year in interest.

The NESV offer does not have any provision to pay off the existing owners, who stand to lose £144m - which is why they are so vehemently contesting last week's decision.

His New York-based spokesman Mark Semer, in response to Broughton's claim about the RBS undertakings, last week told Bloomberg News: "There were no such undertakings given to Broughton. The board has been legally reconstituted, and the new board does not approve of this proposed transaction."

Sport
Luis Suarez and Lionel Messi during Barcelona training in August
footballPete Jenson co-ghost wrote Suarez’s autobiography and reveals how desperate he's been to return
News
newsMcKamey Manor says 'there is no escape until the tour is completed'
Voices
Hunted: A stag lies dead on Jura, where David Cameron holidays and has himself stalked deer
voicesThe Scotland I know is becoming a playground for the rich
News
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Architect Frank Gehry is regarded by many as the most important architect of the modern era
arts + entsGehry has declared that 98 per cent of modern architecture is "s**t"
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
newsSam Smith’s Mobo triumph is just the latest example of a trend
News
Laurence Easeman and Russell Brand
people
Sport
Fans of Dulwich Hamlet FC at their ground Champion Hill
footballFans are rejecting the £2,000 season tickets, officious stewarding, and airline-stadium sponsorship
News
Shami Chakrabarti
people
Arts and Entertainment
Benedict Cumberbatch has refused to deny his involvement in the upcoming new Star Wars film
filmBenedict Cumberbatch reignites Star Wars 7 rumours
Sport
football
News
news
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker