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Posts Tagged ‘gillett’

• Email comment emerges in court bid to block Hicks and Gillett
• Liverpool’s then managing director unconvinced by NESV

Christian Purslow, Liverpool’s former managing director, described New England Sports Ventures’ original offer to buy the club as a “bottom of the barrel” deal, it has been revealed in court. In an email sent to fellow directors only a month before NESV bought Liverpool for £300m, Purslow, who left the club within days of the takeover, cast doubt on the group’s ability to pay off the debt built up by the then owners, Tom Hicks and George Gillett, to build a new stadium and to invest in the squad. The only positive, he wrote, was that NESV “existed”.

Purslow’s email emerged at the high court where NESV, the former Liverpool chairman Martin Broughton and the Royal Bank of Scotland are seeking to extend indefinitely an injunction that prevents Hicks and Gillett suing for damages abroad. Hicks called October’s £300m deal “an epic swindle” at the time and launched a $1.6bn lawsuit in Dallas in an attempt to halt the sale. RBS, Broughton, and NESV responded with an injunction that Hicks and Gillett want removed in order to pursue a legal claim in the United States.

Liverpool’s owners, now called Fenway Sports Group, eliminated all of the acquisition debt placed on the club by Hicks and Gillett when they completed their takeover on 15 October last year. Plans for a new stadium, however, are under review with John W Henry and Tom Werner, the principal owner and the chairman respectively, considering a redevelopment of Anfield. The owners also spent £57.8m to sign Andy Carroll and Luis Suárez in the January transfer window, although that was offset by the £56m sales of Fernando Torres and Ryan Babel.

In the email sent to his fellow directors Broughton, Ian Ayre and Philip Nash on 15 September 2010, Purslow wrote: “To get it straight, I think we should avoid the natural temptation to jump straight in to the deal with NESV. Whilst they are charming, intelligent and credible their bid is by any standards at the extreme bottom end of the ‘right deal’ threshold we set for ourselves: it only reduces debt by less than half and is I feel unlikely to yield incremental equity to fund a stadium.

“They may say they have money if necessary but I do not take this very seriously. Their eyes only lit up at the idea of other opportunity improvements. An American deal guy simply can’t avoid using other people’s money if they can.

“There is no extra money on the table to enable short-term investment in what remains a squad palpably needing more quality if we are to be definitively top four. New American sport team owners with the senior guy being a hedge fund manager could not be worst [sic] from an image standpoint, which is an issue for us independents. I have not even talked about valuation. I leave that to other members of the board. So what is positive? Answer, they exist. Which is not a lot, but it is not to be underestimated in importance.”

Purslow added that the board should “double check that none of the possibles who have come and gone in the last 18 months to apparent levels lower than Sharjah but higher than NESV are not there. So I repeat this is a bottom of the barrel outcome.”

The email is one of 75,000 that allegedly refer to the sale process, with the Sharjah reference believed to be that of an earlier £600m offer from the Middle East. The case continues.

LiverpoolJohn W HenryAndy Hunterguardian.co.uk

The stock of Liverpool’s chairman Martin Broughton has rocketed in the eyes of the club’s supporters after his victory against owners Tom Hicks and George Gillett

Liverpool is littered with heroes and this morning, a few minutes after 11 o’clock, their supporters greeted some more. As Martin Broughton, the club’s chairman, stepped out of Court 18 of the Royal Courts of Justice, followed by his fellow directors Christian Purslow and Ian Ayre, and the trio’s legal team, they were met by roars of approval from waiting men carrying Liverpool scarves and shirts emblazoned with Liverbirds. It was a curious sight but a wholly inappropriate one given the momentous victory that had just been achieved.

Unrelenting despair has come to characterise this once mighty football establishment but after events at the high court today, Kopites can truly start dreaming of better times to come. That is because after a case spreading over two days and taking in more than six hours of legal arguments, Mr Justice Floyd has ruled that Liverpool’s current owners, Tom Hicks and George Gillett, can no longer continue with their attempts to block a sale of the club, most likely to New England Sport Ventures, owners of the Boston Red Sox, who had a £300m bid for the club accepted last week before Hicks and Gillett tried to derail the process by replacing Purslow and Ayre with two of their own cohorts.

The case against Hicks and Gillett was not actually brought by Liverpool, but instead by the Royal Bank of Scotland, who are owed close to £235m by the Americans, the deadline for which expires this Friday. They deemed the actions of the pair as a breech of an agreement signed in April, which gave them the finances to extend their control at Anfield in exchange for an agreement that the Americans would allow Broughton, appointed by RBS, to see through a sale of the club within six months.

“Breathtaking arrogance” was how Richard Snowden QC, representing RBS, characterised the conduct of Hicks and Gillett in trying to block the sale of Liverpool to NESV. It was “as clear a breech of contract as you will ever see” he went on to say yesterday in a packed Court 16, where the case initially started. During the course of that day, a catalogue of counter evidence was heard which turned this already stupefying sporting saga into one of even greater drama and intrigue. Paul Girolami QC, representing Hicks and Gillett, admitted they had breeched their sales agreement with RBS but claimed they only did so because Broughton, Purslow and Ayre, the other members of Liverpool’s five-man board, had overlooked two other offers for the club, from the Singapore billionaire Peter Lim and Mill Financial, a US hedge fund which is understood to have assumed control of Gillett’s stake in the club. Girolami accused the “English directors” of excluding Hicks and Gillett from the sales process and creating their very own sub-committee, which they were accused of referring to in emails as “the home team.”

This accusation, among many other put forward by Girolami, was dismissed not only by Snowden but also Lord Grabiner QC, the much-experienced, much-respected and, at times, amusing representative for Liverpool. He claimed the “home team” reference was simply the name of a conference call line the board used to speak to bidders and described Hicks and Gillett as “slippery” for attempting to adjourn a meeting to discuss the NESV offer by a week knowing full-well that the group, headed by John W Henry, wanted an answer to their proposal by last Friday.

All this took the case into another day and into the smaller Court 18. “It’s as packed as the Kop” remarked one observer pressed up against the wall as Justice Floyd summarised the case and prepared to give his verdict. It duly arrived at about 10.40am when the judge granted RBS a mandatory injunction against Hicks and Gillett, preventing them from again trying to restructure the club’s board and meaning Purslow and Ayre were back on it. He also threw out an attempt by the Americans to have an interim injunction placed on the board as well as ruling that they should pay the court costs for both RBS and the Liverpool board. Lord Grabiner estimates those costs will be between £250,000 and £500,000.

In a final kick for the Hicks and Gillett, who took over at Liverpool in February 2007 with promises of building a new stadium and ploughing millions into the club before reneging on both of those promises, their QC was advised by Floyd that it would be “inappropriate” of them to appeal the ruling. They may, however, still decided to do so.

What now? Well, Broughton will reconvene a board meeting for 8pm this meeting for which, he stated clearly afterwards, Hicks and Gillett, are “certainly invited”. That meeting will confirm the sale of the club to NESV and it is hoped that the sale, which will clear the club’s £200m-plus debts, can go through before Friday’s deadline with RBS.

All this begins to lift the dark, spreading cloud that has hung over Liverpool for over a year now. It also means they are unlikely to go into administration – the heaviest cost should Hicks an Gillett have won – and, as such, avoid a potentially devastating nine point penalty, which would have seen them go into Sunday’s Merseyside derby against Everton bottom of the league on minus three points.

There is no great evidence to suggest that NESV will be any better for Liverpool than Hicks and Gillett were but they cannot be any worse. Little wonder then that the supporters who gathered inside and outside the High Court today were so relieved to hear that the owners could no longer block a sale of the club, which it was widely accepted they were only doing in order to minimise their own individual financial losses and not, as they argued in court, for the benefit of the club they have seen to ruin.

Fighting their actions throughout have been Broughton, Purslow and Ayre, who up to today have all been treated with great suspicion by Liverpool supporters. No more, however. “We love you Martin, we do” they chanted as the trio departed down Fleet Street. It was that type of day.

LiverpoolSachin Nakraniguardian.co.uk

Acquisition of Liverpool Football Club by owner of Boston Red Sox could see Hicks and Gillett lose £144m in loans

An extraordinary two days at Liverpool Football Club have tonight left its fans with the prospect of a debt free club and its American owners facing a court battle against their own board and the possible loss of £144m following a takeover bid from the owners of the Boston Red Sox baseball team.

Liverpool’s board agreed this morning to sell the club to John Henry’s New England Sports Ventures (NESV) group, though the current owners, Tom Hicks and George Gillett, have said that they intend to oppose the deal, which they say “dramatically undervalues the club”.

NESV tonight promised to give the club “the resources to build for the future, including the removal of all acquisition debt ” and to “bring back the culture of winning” if and when its purchase goes through.

Hicks and Gillett stand to lose their £144m loans to Liverpool if the proposed sale of the club goes through next week.

The deal with Henry is valued at £300m which incorporates £200m to repay debt owed to the Royal Bank of Scotland, £40m to cover non-banking liabilities and £60m in debts relating to the planned development of the proposed new Anfield stadium in Stanley Park.

This leaves no room for the repayment of the loans which Hicks and Gillett made to Liverpool, which stood at £144m on 31 July 2009, the date of the club’s last published accounts. With Hicks and Gillett having been keen also to turn a profit from any sale of their shares in Liverpool, the reality that they are now set to make a huge loss, makes it clear why the Americans are so resistant to the deal with Henry.

Martin Broughton, the Liverpool chairman, has insisted that an attempt by the club’s owners to frustrate the sale of the club is a “flagrant abuse” of “written undertakings” and that he is the only person entitled to do such a thing.

An NESV statement tonight highlighted its success with Boston Red Sox, who have won the World Series twicesince they they took over in 2002. “Our portfolio of companies are all committed to one common goal: winning,” the companies writes. It pledges to “stabilise the club and ultimately return [them] to their rightful place in England, and European football, competing for and winning trophies”. No mention is made of the possible redevelopment of Anfield.

The Premier League released a statement this afternoon confirming Liverpool’s intention to change owners. “We can confirm that Liverpool FC has formally notified the Premier League of an intended change of control and that the board has undertaken to complete all the necessary processes by Friday 8 October so that the sale of the club can proceed,” said a spokesperson.

Legal action is expected to proceed next week to decide on whether the Liverpool board acted validly in completing the sale of the club.

LiverpoolBoston Red SoxPremier LeagueUS sportDavid ConnSimon Burntonguardian.co.uk