Liverpool sale hits roadblock in Texas

Updated: October 13, 2010, 9:21 PM ET
ESPN.com news services

LONDON -- A Texas court issued a temporary restraining order to prevent the sale of Liverpool to New England Sports Ventures, minutes before the club's board members were due to announce the sale.

New England Sports Ventures, led by Boston Red Sox owner John Henry, completed a deal to take over Liverpool on Wednesday night, but Liverpool's current American owners, Tom Hicks and George Gillett Jr., are determined to halt the sale and the legal action could derail the deal.

Hicks and Gillett are also suing three Liverpool board members, the bank controlling the club's debt and prospective buyer New England Sports Ventures for a total of $1.6 billion in damages. The pair called the attempt to sell the club to NESV an "epic swindle" and that the offer was "hundreds of millions of dollars below true market value."

The restraining order was signed by Judge Jim Jordan of the 160th District Court in Dallas and the Texas State District Court set a hearing date of October 25.

Liverpool's directors say they are seeking the removal of the injunction and remain "resolved to complete the sale" of Liverpool to NESV.

A statement from the Hicks camp said the Royal Bank of Scotland "has been complicit in this scheme with the Director Defendants. For example, in letters from RBS to potential investors obtained just within the past few days, RBS has informed investors that it will approve of a deal only if there is 'no economic return to equity' for Messrs. Hicks and Gillett.

"In furtherance of this grand conspiracy, on information and belief, RBS has improperly used its influence as the club's creditor and as a worldwide banking leader to prevent any transaction that would permit Messrs. Hicks and Gillett to recover any of their initial investment in the club, much less share in the substantial appreciation in the value of Liverpool FC that their investments have created."

Earlier Wednesday, Henry arrived at a hastily called meeting of Liverpool's board of directors Wednesday, hoping to complete a takeover of the Premier League club after a British court cleared the way for a sale.

The board meeting in central London was convened hours after a High Court judge ruled against Liverpool's current American owners, who were trying to block the sale to NESV.

The board was informed of the Texas injunction by the owners in a teleconference. But a few hours later, the board resolved to complete the sale, despite accepting that the temporary order was enough to "prevent the transaction being complete."

"Well done Martin, Christian & Ian," Henry announced on his Twitter account after the court case finished. "Well done RBS. Well done supporters!"

Henry did not comment outside the law firm office where the Liverpool meeting was held.

While his group has already signed a binding agreement, a Singapore billionaire maintains that his higher offer should be reconsidered. Liverpool's three English directors agreed last week, against the wishes of Hicks and Gillett, to sell the club to New England Sports Ventures for $476 million.

Liverpool, which won the most recent of its 18 English league titles in 1990, is off to its worst start to a season since 1953 and is mired in the relegation zone.

"We are ready to move quickly and help create the stability and certainty which the club needs at this time," Henry's group said in a statement before the board meeting.

Singapore businessman Peter Lim is still pursuing his rival bid for Liverpool. He urged the board to consider all the offers and "not simply ratify a sale." Lim, who originally matched the Boston offer, made an improved bid Tuesday of $506 million.

"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," Lim said Wednesday. "I hope that when the board is reconstituted ... it will consider all the offers before them.

"I am asking the board to run a full and fair process that enables all of the offers to be considered on their merits before the future of the club is decided."

The board meeting comes ahead of Friday's deadline to repay the club's debts to the Royal Bank of Scotland. The bank said in a statement it has "every confidence that having been put on a proper footing, the board will now reach appropriate decisions regarding the next steps."

Liverpool chairman Martin Broughton hasn't specified which bids will be considered.

"This will pave the way to a sale," Broughton said outside the court after Wednesday's ruling. "We will have a board meeting this evening and proceed with the sale process.

"I'm not going to prejudge the board meeting. It would be inappropriate to prejudge what the board is going to say. But the club's going to have a great future," Broughton added. "We will get the right owners for the fans."

The ruling was a victory for Broughton, who was hired to oversee the sale process in April, along with managing director Christian Purslow and commercial director Ian Ayre.

Hicks and Gillett claim the offer from Henry's group undervalues the club and their legal team argued in court that bids should be reconsidered. The judge, who heard five hours of court arguments Tuesday, ruled that Hicks and Gillett have "no absolute right to veto a sale" and said he didn't want to issue a ruling that could "damage" the Boston bid.

"In these circumstances, it would be entirely wrong to grant the owners" an injunction to stop the sale, the judge said, adding it would also be "inappropriate" for Hicks and Gillett to appeal. The owners will also have to pay legal costs of up to $792,000.

Outside the court, dozens of Liverpool fans -- many wearing team shirts and waving banners and club scarves -- chanted slogans against Hicks and Gillett and serenaded the three board members with the Liverpool anthem, "You'll Never Walk Alone."

Had the sale been blocked, Liverpool could have fallen into financial administration, a form of bankruptcy protection that would have incurred a nine-point penalty from the Premier League.

"The work off the pitch has been done," 25-year-old fan Kam Dhinsey said outside the court. "Now the players need to work harder and get the right results on the pitch, because this must have been playing on their minds."

It was also revealed Tuesday that American hedge fund Mill Financial had put in a bid that also pledges to wipe out the club's debts and would provide up to $154 million to fund a new stadium. Mill Financial technically controls Gillett's 50 percent stake after he defaulted on the loan used by Gillett to fund his part of the leveraged takeover in 2007.

Information from ESPNsoccernet was used in this report. The Associated Press contributed to this report.

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