Wednesday, October 6, 2010

Power War Erupts At Anfield

Liverpool were plunged into institutional crisis on Tuesday night after an extraordinary day saw owners Tom Hicks and George Gillett sack the club board in an effort to derail a takeover by one of two new bidders seeking to buy the club. The club board was scheduled to meet on Tuesday to consider two new bids for the club, one of them from American sports group New England Sports Ventures, owners of the Boston Red Sox baseball team. Liverpool chairman Martin Broughton and the other non- owner directors, managing director Christian Purslow and commercial director Ian Ayre were ready to review the bids and potentially approve a sale. Shortly before the meeting, however, the board was served with an injunction by Hicks and Gillett, who claim that the board has not been acting in their best interests as owners by pursuing the new offers. In the legal action the owners sought to remove Purslow and Ayre and replace them with Hicks 's son, Mack Hicks, and Lori Kay McCutcheon, a move that would have given the owners a majority and control of the club 's destiny. Broughton and his fellow non- owner directors contested the injunction and, in an attempt to retain control of the club, formed a three-man sub- committee that they agreed would continue to run the club. The owners' extraordinary steps bring the civil war with the UK- based directors to a head, and leaves the club mired in a legal battle just as hopes of a successful sale had been raised. Broughton was engaged by the Americans after the Royal Bank of Scotland demanded a credible figure to expedite a sale, but now finds himself under fire because of his attempts to do just that. The chairman has already engaged lawyers to examine whether he and the non-owner directors had the power to sell the club against Hicks and Gillett 's wishes, and they will now consider how the owners' injunction can be fought. Whether Broughton is able to secure a sale may now rest on interpretations of company law, but New England Sports Ventures remain interested despite the dysfunction on the board. NESV is controlled by John W Henry, a futures and foreign trader whose fortune has been estimated at more than $600   million (£378 million). Television producer Tom Werner is also a shareholder, as is the New York Times Company. They bought the Red Sox in 2002. Negotiations with Broughton began several weeks ago and despite some misgivings about selling the club to another American proprietor, NESV believe that it was the preferred bidder and was confident of a deal. The provenance of the second bid is unknown, but both bidders are understood to be offering about £300  million. That is enough to cover some or all of the £280 million in loan and fees owed to Royal Bank of Scotland, which become due on Oct 15. Sources have indicated that Broughton and his UK-based colleagues are content that both potential owners would mark an improvement on Hicks and Gillett, and both bidders are understood to be acceptable to RBS. The Premier League is also understood to have been informed of the identity of the two new bidders, though neither has yet formally begun clearing the regulatory hurdles set out by the league. For their part Hicks and Gillett are determined to secure a return on their ownership of the club, and believe that offers of £300 million grossly undervalue the club. They also believe that neither of the new bidders satisfies Broughton 's condition that any new owner should have funds to invest in the new stadium and the playing squad. They also believe that recent adverse media comment has prompted Broughton to seek a swift sale. In a statement issued on Tuesday night Liverpool confirmed that it had received two offers for the club and the legal dispute. "The Board of Directors have received two excellent financial offers to buy the club that would repay all its long-term debt, " the statement said. "A board meeting was called today to review these bids and approve a sale. Shortly prior to the meeting, the owners – Tom Hicks and George Gillett – sought to remove managing director Christian Purslow and commercial director Ian Ayre from the board, seeking to replace them with Mack Hicks and Lori Kay McCutcheon. This matter is now subject to legal review and a further announcement will be made in due course. "Meanwhile Martin Broughton, Christian Purslow and Ian Ayre continue to explore every possible route to achieving a sale of the club at the earliest opportunity. " Liverpool rooted in the The future of the club may ultimately rest on the attitude of RBS, which is considering whether to refinance the Americans or force them out. The bank is reluctant to take control of the club given the public-relations risks involved. Ultimately only it has the leverage to force an end to the impasse that threatens to derail not just the club's season, but its future too.

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