Monday, October 11, 2010

Plan-B There To Ensure Liverpool Takeover

Liverpool Football Club have an
as-yet undisclosed “Plan B” to
ensure that the club's sale to
New England Sports Ventures
(NESV) goes through without
Liverpool going into
administration, and that is one
reason for confidence that the
club will avoid a nine-point
penalty, a close source has said.
The development comes after
Liverpool's managing director,
Christian Purslow, said he was
“ not even contemplating
administration and nobody
should be ” yesterday.
Purslow said he was “completely
focused on the sale” to NESV, and
even outlined how the new
potential owners would consider
a supporters' stake in the club,
and how they remain open to
building a new stadium.
Broughton agreed a £300m sale
deal last week with NESV, which
is headed by John W Henry and
which owns the Boston Red Sox,
only for the sale's legitimacy to
be questioned by the club's
incumbent owners, Tom Hicks
and George Gillett. Broughton
argues that he is within his
rights to sell Liverpool under
conditions ultimately agreed by
Hicks and Gillett, who counter
that Broughton is wrong.
A High Court hearing this week,
probably as early as tomorrow,
will decide which party is right.
If Broughton's legal advice
proves correct, the sale to NESV
will go through quickly, pending
what would be a swiftly-handled
appeal, and Hicks and Gillett will
be left with losses of around
£144m from their time at Anfield.
If Broughton fails in court, it has
been suggested that
administration is imminent for
Liverpool, and that they would be
deducted nine points by the
Premier League.
Briefings over the weekend from
the NESV camp also suggested it
would walk away from Liverpool
if the club was hit with a nine-
point penalty.
But in all likelihood, the club
won't get anywhere close to
administration. One reason is
that Broughton has what are
being described as “fallback”
options (“a Plan B and Plan C”,
says a source), which he believes
can force through a sale to NESV
without administration.
The details of these aren't known
but would involve convoluted
legal mechanisms, with Royal
Bank of Scotland probably
extending its nominal 15 October
deadline while they were played
These would only come into play
if Broughton loses.
In any case, given that RBS would
ultimately trigger administration,
and that there is no logical
benefit to RBS of Liverpool going
into administration, it is hard to
see that Liverpool will end up
Why? Because with Liverpool in
administration, RBS would no
longer be guaranteed to get all
its money back. It would lose
control of the situation.
Theoretically, it could end up
with 20p in the pound or similar.
Also, the bank now knows
administration will trigger a
points penalty, and that a penalty
will increase the chances of the
club being relegated, and
therefore slash the club's value,
decreasing the chance of RBS
getting its money back via a
post-administration sale. NESV's
briefings insist a points penalty
will see NESV walk away,
although it cannot be certain
whether this stance is a genuine
one. A nine-point penalty would
make Liverpool less attractive,
but on the other hand it would
drive the price down, setting up
even more of a bargain for a
potential buyer. Purslow
reiterated that he is not
contemplating administration —
he has not even discussed it as a
possibility with NESV — and
believes NESV's “winning
mentality” will be good for the
“They're deadly serious about
wanting to succeed,” he said,
adding NESV were “really serious
about the importance of
engaging with their fans. So I've
asked them to consider a scheme
at our club that will give our fans
a real sense of ownership, a real
sense of inclusion, the kind of
voice, if you like, that frankly they
deserve. And NESV have told us
they'll look at this very seriously if
they complete (the deal). ”
Purslow added that Hicks and
Gillett now have an “opportunity”
to stop opposing the NESV deal.
“ That might enable them to leave
with some dignity and some
peace rather than precipitating a
messy dispute, ” he said.

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