Hicks and Gillett’s plea for more time to pay Liverpool FC trial costs dismissed

THE former owners of Liverpool FC have been ordered to pay a sum in the region of £1m as security if they want to continue their long-running legal battle over the sale of the club to New England Sports Ventures (NESV).

Tom Hicks and George Gillett applied to the Court of Appeal to delay the High Court trial – scheduled for April – to give them more time to raise the money.

But this was over-ruled by Lord Justice Lewison which means Hicks and Gillett will have to pay up if they wish to pursue their bitterly-fought legal campaign through the courts.

In October Mr Justice Peter Smith ruled that the case should start in April and ordered the claimants to surrender security for costs. It was this which Mr Hicks and Mr Gillett were appealing against.

It was argued that the claimants could not raise the funds to pay for the case should the trial begin in April and that the payment for security for costs should not be “expedited”, delaying the case until late 2013 or early 2014.

The legal battle began after Liverpool FC was sold by RBS bank to NESV – headed by American businessman John W Henry – in a £300m deal in October 2010.

Mr Hicks and Mr Gillett tried and failed to block the sale. They claimed the club was sold at a “substantial undervalue” and said RBS “deliberately” blocked their attempts to “refinance”.

RBS provided Mr Hicks and Mr Gillett with a large loan facility which they used to help buy the club.

The American pair called the sale to NESV “an epic swindle at the hands of rogue corporate directors and their co-conspirators,” referring to the role played by the club’s former chairman Sir Martin Broughton, managing director Christian Purslow and commercial director Ian Ayre.

Mr Hicks and Mr Gillett believe they are due compensation following the sale of the club to Boston-based NESV - now renamed Fenway Sports Group - and that the club was worth a lot more than £300m.

In his written ruling, given on December 20 Lord Justice Lewison referred to the “bitterly fought and very expensive proceedings.”

He also referred to the “extraordinary volume of paper, the extravagantly long skeleton arguments which more resemble the Michelin Man than skeletons.”

According to the Court of Appeal ruling the claimants have now paid £712,000 on account securing the future of the case, well short of the estimated £5m they have been ordered to pay as security if they want to go to trial.

The 10-week trial is now due to begin on April 22.

Both RBS and representatives for Mr Hicks declined to comment on the latest development.

But a source close to the case said: “The ball is now very much in Hicks and Gillett’s court.

“If they want the trial to go ahead in April they will have to put up that money.”

Before the takeover by Fenway the three-and-a-half year reign of Hicks and Gillett at Anfield had become increasingly fraught with fans’ groups campaigning for them to be removed.

Reds fans were unhappy about the failure to start work on a long-promised new stadium and the large debts the club was being saddled with by the American pair who relinquished control in acrimonious circumstances.



Read more: Liverpool Echo http://www.liverpoolecho.co.uk/live...#sitelife-commentsWidget-bottom#ixzz2Ha2NWBFC

 

Horrible slimy twats.

 

i hope they fail, and one day soon hopefully they both get what they f ing deserve pair of c*nts.

 

What happens if they "can't make" the court date...?

 

What happens if they win the case.?

Highly unlikely they will but imagine the consequences for LFC if the twats do.

 

Surely they can't take the club back? I would imagine it would be a hefty financial penalty for RBS, FSG and/or the three Liverpool reps? If it turns out to be FSG then it can't be good for us but still better than H&G getting the club back!

Having said all that, they won't win anyway! Not even convinced they will come up with the £1m

 

So the club was sold for £300m and these guys can't afford to pay a £1m deposit. That certainly is "epic".

 

surley the only ones liable for any compo paid or owed would be RBS, cant see from a legal point of view FSG have done anything wrong. the question is did RBS have the power to sell LFC to FSG and i presume yes or RBS wouldn't have been stupid enough to have gone through with it if any doubt.

 

If(a massive if)they win they would get the club back wouldn't they?, because they'll have proved they were conned out of ownership by FSG and our then chairman and club secretary.

As for Astro's point, the ****s lost millions when they sold their other assets and since the credit crunch and recession their buck aint worth what it used to be worth.

 

I don't really understand their argument. The club at the point of sale was almost entirely owned by the bank and H&G had all their equity underwater. If the bank want to sell their debt at discount to FSG then that's their choice. banks sell debt at discount all the time when they want out of a business. H&G are desperate fat scrotes

 

Here's the legal bumf on the case

http://www.thelawyer.com/thomas-hic...rs-v-martin-broughton-and-ors/1016271.article

http://www.thelawyer.com/court-of-appeal-refuses-to-delay-liverpool-fc-trial/1016329.article

 

Unfortunately, the law doesn't always work like that!

I was involved in a employment tribunal not too long ago. Company A owned some buildings and employed Company B to manage them. After two and a half years, Company A decided to change the way these buildings were managed and terminated the agreement with Company B. they Employed Company C to do the cleaning instead.

Company B made the point that they employed a cleaner who, through TUPE rights, was entitled to keep their job and should be transferred to Company C. Company C asked Company A if TUPE applied to this agreement too. Company A said no to both the others. the cleaner too the case to court where Companies B and C had to fight it out. Company A was completely blameless despite it clearly being completely their fault

Obviously very different circumstances but, in short, the law is ****ed up

 

The bank installed Broughton on the board due to H&G missing their repayment deadline. However, H&G still owned the equity i.e. the shares, as the bank didn't foreclose on the loan i.e. force them into administration - as that would have obviously impacted on the value of the asset i.e the club & they'd have not been guaranteed to get their money back.

By doing it the way they did LFC was really in administration by proxy, but despite H&G signing an agreement to allow RBS to install Broughton & oversee the sale, their argument is that the bank sold their asset at a value much less than it's real worth & they therefore missed out the difference between the value of the outstanding debt & the sale price - RBS merely sold it for the value of their outstanding debt, which they could get away with if administrators were appointed, but could be viewed as sharp practice given the circumstances. Broughton as the appointed Chairman / CEO had a legal responsibility to do what was in the best interests of the shareholders, he patently failed in this responsibility as far as H&G are concerned.

It's a complex case, will drag on & be extremely expensive by the sounds of it. H&G might be throwing good money after bad here, & that's the conclusion I expect them to come to, albeit imo (despite what you might think of them as individuals etc) I think they've been wronged here tbh.

To answer PMK, they would be claiming for compensation from RBS & Broughton, they would never be given the equity of LFC back, so you can rest easy there.

 

cheers TB,

that made a lot of sense

and put any fears i might have had to rest as well lol

 

Not a fu<king chance

 

Would they go after Broughton though? He was appointed by RBS to oversee the sale of the club (or in essence the sale of the debt owed to them). He succeeded at doing what he was ordered to do. It wasn't him that decided the price to sell it at.

I also feel that H&G have a case here. As much as they deserved it the sale at that price was harsh, as 300m probably left nothing for the investors.

RBS could claim that they were days away from administration and that H&G showed no intent to ever repay the debt before the administration date. If there were no other bidders it could help RBS a lot.

 

Never mind, I just read what TB posted about Broughton.

But since Broughton was brought on by RBS to oversee the sale of their debt, would his fiduciary duty not be towards the interests of RBS and the club (avoiding administration) rather than the interests of the shareholders?

 

Not in my opinion, as the bank chose not to force the club into administration (as it was in their best interests not to) & they were the only debtor. So them inisisting on Broughton's appointment was fine, but as the CEO Broughton still had a responsibility to act in the best interests of the shareholders & they were H&G & he patently failed in that regard. Legally it was decided in the High Court that RBS & Brougthon had the legal power to sell, however the matter of who's best interests that sale was in favour of, is more complex.

 

Boots, you are giving a very simplistic view of Broughton's role in the sale. Whilst, in 'normal' circumstances it would indeed be the prime responsibility of the CEO to act in the shareholders best interests, Broughton was not brought in to act merely for the owners but also for the major creditor. Therefore it can (and probably will) be argued that (a) Broughton's responsibility had a wider remit and (b) that the definition of best interest is more than the highest price.

As you rightly say the High Court has ruled that RBS and Broughton did have the right to sell and therefore NESV's ownership cannot be contested. All that H&G can do is to seek compensation for the act of sale. Even if they do succeed in proving that compensation is due, the liability for that compensation would not fall upon either FSG or LFC.

 

Not legally. The fiduciary duty is to act in the interests of the shareholders until the club is put into administration, and at that point it changes to the interests of the debtors as a whole. Ironically enough, at no point do a club's directors ever have a fiduciary duty to the club itself (see Portsmouth), which is why Broughton, Purslow and Ayre are being accused. They could probably have dodged the whole issue by putting LFC into voluntary administration before the sale, at which point H&G would have had **** all rights to anything, but that would have been bad for the club (ten point deduction and possible transfer ban).

So it's all kicking off cos the directors actually cared more for the club than for the cowboys who were screwing it. A good example of why business and football rarely mix!