Thursday, October 14, 2010

Hicks Claims $1.6bn In Damages

The statement issued by the
pair is as follows:
The owners of Liverpool Football
Club today reported that a Texas
State District Court has granted a
temporary restraining order
(TRO) enjoining the Board of
Liverpool Football Club (LFC) from
executing a sale of the Club to
New England Sports Ventures
(NESV). The court set a hearing
date of October 25, 2010.The
TRO request, signed by Judge Jim
Jordan of the 160th District Court
in Dallas, was part of a lawsuit
filed today by the owners of LFC
against Royal Bank of Scotland
(RBS), Martin Broughton,
Christian Purslow, Ian Ayre, NESV
and Philip Nash. The lawsuit also
seeks temporary and permanent
injunctions, and damages
totaling approximately $1.6
billion (over £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 (and well below
Forbes magazine ’s recent
independent $822 million
valuation of the club) – and
below multiple expressions of
interest and offers to buy either
the club in its entirety or make
minority investments (including
Meriton and Mill Financial). It
describes how the defendants
excluded the owners from
meetings, discussions and
communications regarding the
potential sale to NESV and
interfered with efforts by the
owners to obtain financing for
Liverpool FC.
The Club’s owners are
represented by attorneys from
the international law firm of Fish
& Richardson.
The following are some of the
key points in the complaint,
which details the roles of RBS
and the other defendants, and
also describes previously
undisclosed offers to purchase
“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. 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. ”
“On or about October 4, 2010,
Mr. Hicks received a letter of
interest from a third potential
purchaser represented by FBR
Capital Markets (“FBR”), offering
to purchase Liverpool FC for £375
to £400 million ($595 to $635
million). The letter informed Mr.
Hicks that the potential
purchaser would not need
financing, possessed the funds
to close the transaction, and
intended to build a new stadium
for Liverpool FC. ”
“Additionally, the Plaintiffs
learned just days ago about
another potential investor that
made a similar offer in the £350
to £400 million range that was
communicated to Defendant
Broughton and another
unnamed co-conspirator in late
August. According to this
investor, Mr. Broughton never
responded to the offer.
Moreover, when the purported
sale to NESV was announced, this
investor again contacted Mr.
Broughton and informed him
that the offer, which significantly
exceeded the NESV offer, was still
on the table. Again, Mr.
Broughton brushed this offer
aside without further
discussion. ”
As the news broke that the TRO
had been granted to the dismay
of Liverpool fan ’s who had
started, with caution, to look to
brighter days, questions reigned
in as to the jurisdiction that a
Texas Court could have in such a
matter that had already been
ruled on by the High Court in the
UK. Whilst both NESV and RBS are
believed to be respecting the TRO
in order to protect their
investments in the US and taking
legal council on the situation,
contact was made by Liverpool
fans with the issuing Texan court
which resulted in Judge Jim
Jordan ’s Facebook Page being
removed and the courts
telephone service becoming
“ unavailable”.

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