Tuesday, October 12, 2010

RBS vs Hicks Case To Resume After Lunch

Royal Bank of Scotland, the club's
major creditors after lending
Hicks and Gillett the money to
buy the club back in March 2007,
have taken the duo to court to
force through the £300 million
sale of the club - sanctioned by
their man on the Liverpool board
Martin Broughton - to New
England Sports Ventures.
Hicks and Gillett are opposed to
the sale and the key issue in
court 16 of London's Royal
Courts of Justice is who has the
necessary authority to agree a
The Liverpool board was
reconstructed in agreements
Hicks and Gillett were party to
when the Americans were forced
to seek a six-month extension
with the RBS on their £237
million loan in April. The deal
brought in Broughton as
Liverpool's independent
chairman, with powers to sell the
Hicks and Gillett rejected an offer
by NESV to buy the club last week
but Broughton and two other
members of the board accepted.
The American duo reacted by
attempting to sack the board, an
act that RBS lawyers told the High
Court was a breach of clause C3
of their April agreement with
regards to restructuring the
RBS barrister Richard Snowden
QC then appealed to the judge,
Mr Justice Floyd, to "restore a
clearly constituted and
functioning board" who could
sell the club to potential new
owners NESV and added: "It
cannot wait and it would be
wrong for Mr Hicks and Gillett to
profit from their tactics."
The judge was asked to impose
injunctions on the owners
requiring them to restore the
original constitutions of the
companies and managing
directors, therefore removing the
final stumbling block to a
Hicks and Gillett's
represenatitives reacted to RBS'
opening comments by saying:
"This is not about the owners
trying to force Liverpool into
administration or another form
of insolvency.
"This dispute then is about
maintaining terms of the sale
agreement: mainly that all
alternative offers are properly
considered by the board before
an offer is accepted."
Another takeover offer arrived
from Singaporean stockbroker
Peter Lim on Tuesday morning as
an alternative to the NESV deal
favoured by RBS.
RBS' loan to Hicks and Gillett is
due for repayment on Friday
irrespective of the outcome of
the court case.

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