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How did it get this bad for Liverpool?

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David Bond | 06:49 UK time, Wednesday, 13 October 2010

Whatever judgment Mr Justice Floyd delivers this morning, Liverpool's day in the High Court yesterday exposed in painstaking detail the complete breakdown in trust between the club's owners, their bankers and the men brought in to try to rescue the sorry mess.

After almost five hours of submissions by a series of lawyers whose weekly wage packets might make Fernando Torres blush, many questions were left unanswered.

But as barrister after barrister took it in turns to debate the finer points of corporate governance side letters, mandatory interlocutory injunctions and holdings company board sub-committees, there was one question above all others which kept nagging away at the back of the mind. How was it allowed to get so bad?

This particular case concerns the specific point of whether Tom Hicks and George Gillett, Liverpool's deeply unpopular American owners, breached the terms of a loan extension with the Royal Bank of Scotland in April when they blocked the sale of the club for £300m to Boston Red Sox owner John W Henry last week.

Amazingly, in a witness statement submitted to the court, Hicks admits they did breach the RBS agreement when they sacked Liverpool directors Ian Ayre and Christian Purslow. So that's an open and shut case, right?

Liverpool fans protest outside the High Court

The fight for Liverpool's future will be decided in the courts. Picture: Getty Images

If only. What Hicks and Gillett's lawyer Paul Girolami instead attempted to argue was that Hicks and Gillett only did this because Liverpool chairman Martin Broughton and RBS had already breached that agreement by keeping them in the dark during the sale process.

The owners say Broughton and the board should have given more serious consideration to alternative bids for the club and that they only found about Red Sox owners New England Sports Ventures (NESV) when negotiations were well advanced.

In his remarkable statement, seen by the BBC, Hicks even goes so far as to claim the so-called English directors on Liverpool's club and holdings company boards (Broughton, Purslow and Ayre) had their own secretive "home team" phone line for key takeover discussions - a phone line Hicks and Gillett say they were not invited to use.

By being shut out, Hicks says he had no choice but to reconstitute the board - appointing Hicks Holdings colleague Lori McCutcheon and son Mack Hicks - even though he knew it would breach the terms of the RBS loan extension.

Hicks states: "It was necessary in order to ensure the matter was properly dealt with for us to reconstitute the board... In having done so we acknowledge that that was contrary to the corporate governance side letter."

This side letter drawn up by RBS is the crucial document and sets out the conditions for extending the loan - including allowing Martin Broughton to decide the make-up of the board of Liverpool Football Club (LAFC - The Liverpool Football Club & Athletics Grounds Limited) and the club's holding companies.

Whatever Hicks and Gillett now say about their reasons for the breach, that is the apparent crux of the case. And the admission should render all the other interesting new details offered up yesterday as fascinating but ultimately irrelevant.

These included:

- The labyrinthine company structure created by Hicks and Gillett, consisting firstly of the club, Liverpool (LAFC). It was revealed that RBS is owed £97m by this company which breaks down as a £25m general facility, £52m for players and stadium investment and a £20m revolving facility. Above the club there is Kop Holdings Ltd which owes RBS the £200m main facility. Then there is Kop Football Holdings Ltd. This has security over the assets of Kop Holdings and LAFC. Above that is Kop Football Cayman Ltd and then Kop Football LLP, an American company registered in Delaware. It is this company Hicks and Gillett own 50/50.

- A threat from John Henry's NESV that if the sale to them does not go ahead they will seek damages from Hicks and Gillett worth "tens of millions of pounds". It also emerged that while the deadline for repayment of RBS's loan is this Friday, 15 October, there is a long stop date of 1 November for the deal to be finalised.

- The emergence of a new increased offer from Peter Lim valuing the club at £320m with £40m for new players.

- Claims from Hicks that Mill Financial - a US hedge fund - was prepared to pay somewhere between £375m and £400m to buy the club but was shut out of negotiations.

Now, both offers may well be real alternatives - but that is not really the point. The issue is whether Martin Broughton has the right to sell the club or not. If he has - and this will in essence be addressed by today's RBS ruling - then he has done a binding deal with NESV.

For those Liverpool fans who wore their colours to court, yesterday may have offered more entertainment than their team has of late. At one stage it hardly seemed a fair contest as Girolami, for Hicks and Gillett, found himself seriously outnumbered by lawyers for RBS, Broughton, Liverpool and NESV.

But he gave as good as he got, even if his more outlandish claims caused his rivals to shake their heads in disbelief.

In the end it was Lord Grabiner QC, one of the most eminent barristers on the commercial circuit, who stole the show with his mispronounciation of Gillett's name (Jillett) - a mistake he dismissively corrected later on - and his withering reference to Tom Hicks Jr as "Hicks minor".

These drew laughs from an audience in need of some light relief but he also delivered some killer lines, including the accusation that Hicks's delaying tactics were "slippery behaviour to say the very least".

It was left to Richard Snowden QC, for RBS, to remind us why we were all utlimately in court. RBS, a bank partly owned by us, remember, is owed a lot of money and would like it back - preferably by this Friday.

If Mr Justice Floyd rules in favour of RBS this morning, that would not only bring them (and us) closer to being reunited with that money it would also effectively provide the so-called declaratory judgment Broughton needs to complete the sale to NESV.

That will give Liverpool supporters hope that an end to this tortuous battle for control of Liverpool is in sight.

But if they lose on Wednesday, Hicks and Gillett are almost certain to appeal. And as anyone who has followed this story closely knows - a simple, clean ending was never likely.

Update: 1300 BST

Mr Justice Floyd's judgment is as emphatic as Broughton and the club's bankers Royal Bank of Scotland could have hoped for.

On the application from RBS to reconstitute the board after Hicks and Gillett had changed it last week in an effort to block the sale to New England Sports Ventures, the judge ruled there was no arguable case.

And on a separate application from Hicks and Gillett that they only breached the agreement with RBS because the bank, Broughton and the so-called English directors had already breached it by shutting them out of sales negotiations, the judge was equally dismissive.

In summary, this means Hicks and Gillett breached the terms of the £237m loan with RBS by changing the composition of the board and the bank is therefore entitled to order the board to be reconstituted. Or put more simply, Purslow and Ayre are back on the board.

Mr Justice Floyd went on to say that it was now up to Broughton, the directors of the club and their holding companies to decide whether the sale to NESV went ahead, although he gave Hicks and Gillett until 2000 BST on Wednesday to participate in any board meeting to decide the next step in the sale.

So what happens next?

Broughton and his lawyers will now try to persuade Hicks and Gillett to particpate in a telephone conference to determine whether the original £300m deal with NESV still holds.

NESV claim they have a binding agreement that runs until 1 November but advisers for a rival bid from Singapore businessman Peter Lim, which was increased to £320m, plus 40m for players, on Tuesday, will argue their offer should be reconsidered by the board.

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Hicks and Gillett were told by Mr Justice Floyd that he did not feel it appropriate to grant them an appeal but it remains likely they will go to the Court of Appeal on Wednesday.

There is also the issue of a possible trial next Thursday. The judge made it clear that his rulings were not the declaratory judgment Broughton is seeking on the validity of the deal with NESV.

Clearly there will be no need for a trial if Hicks and Gillett, who claim they now accept the club must be sold, agree a deal at Wednesday's board meeting. And Lord Grabiner, QC for Liverpool's holding companies, told me he did not expect there to be one.

Perhaps the most telling part of Mr Justice Floyd's judgment came when he spoke of the substantial damage he would have caused to the football club had he ruled in favour of Hicks and Gillett. Amazingly, this was only the second time during almost six hours of High Court proceedings that the club at the centre of this dispute was mentioned.

"If I granted an injunction the damage to the club... would be substantial," said Mr Justice Floyd. "The damage would be enormously difficult to quantify. How does one quantify the effect on the fortunes of the club or the underlying value of the asset."

These remarks help to explain why a large crowd of Liverpool fans gathered outside the High Court to greet a jubilant Broughton and Purslow as they emerged. They shook the two men by the hand and chanted anti-Hicks and Gillett songs as Broughton declared that justice had been done.

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Broughton and members of his team then attempted to escape the scrum by running off down the Strand to start the next phase of this extraordinary story - to complete a deal together with NESV that could put the club back on track.


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  • Comment number 1.

    Wow, I'm first for once. More importantly, an excellent blog which sheds light on the situation. Hopefully H&G will be packing their bags by Friday.

  • Comment number 2.

    Have NESV actually got £300m in cash or will they be taking out a loan to buy LFC?

  • Comment number 3.

    Why are H&G still here?? They must know no-one will pay their absurd valuation of the club.

    Can we not deport them both?

  • Comment number 4.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 5.

    Good blog. Doesn't really leave much left to be said except for 'eh?'

    Could also say 'eh?' in response to post #4. Is this some kind of surreal alternative comedy?

  • Comment number 6.

    How exactly is this a insight into the big stories and issues in sport, this is nothing that anyone who read the news (or watched it) didnt already know by yesterday evening.

  • Comment number 7.

    Good Blog. In answer to #6. Yes, it may contain all the stuff thats already in the news but the blog brings all the pertinent facts together.

    I can't really see how H&G can win this one. Hopefully any appeal will also be rejected out of hand.

  • Comment number 8.

    H&G have lost the confidence of the fans, players, its own board and the bank who lent them all the money for "ownership" in the first place. Fit and proper owners? I dont think any right minded person can believe that. How do they live with themselves?

  • Comment number 9.

    IF (and it's a big if) the claims by H and G are true, then I side with them. If they've instructed their staff to find the best deal and they go with the worst, then they are right to sack them or at the very least block the sale.

  • Comment number 10.

    No, can't see H&G winning this either.

    The only question which seems to remain is this :

    Is there any way, in law, that the courts can force the directors to take a look at the alternative offers (reportedly up to about 100 Million more) or not?

    If not - it seems to me that the agreement with NESV is legally completed and binding - then it is all over, baring the short delay for the likely appeal.

  • Comment number 11.


    Broughton has done what he and the Commercial Director and the Finance Director believe is the best deal.

    The "best" deal is not always the one that values the business at the highest value. As the sale to H&G evidences nicely. That was the highest value offer at the time and Moores sold to them to make the most profit he could. Would anyone agree it was the best deal? Hardly.

    Broughton has a resonsibility to ensure the club remains a going concern afterwards. Lets face it , the PL scrutiny is hardly in-depth on this particular area!

    In addition, there is also (according to Broughton) conflicting information regarding the other bids. Mill Financial wanted the sales process to be exclusive for the money they offered, something expressly forbidden by the sale process contract drawn up by RBS and Liverpool. Lim only made his "improved" offer after this went public, possibly knowing full well, it may spark this fiasco and leave him with the only remaining viable bid on the table.

    Unfortunately, I think he miscalculated. If the judge says Broughton was in the right, then the NESV deal is legally binding.

  • Comment number 12.

    good blog...the chain of events is just noise and there to cause ambiguity and confusion.

    decisions to make are clear;

    - does broughton have the authority to close out this sale - resounding yes!
    - has the board been open, fair and diligent in accessing bids - yes again. we had two bids which we went forward with one. LFC hasn't been up for sale for only a few hours to spark a last minute auction frenzy!!...COMPLETELY irrelevant we have additional bids, where were these people in the past..frankly theyve missed the boat plus for all we know this could all be a smokescreen to derail the current bid!!

    My only concern with NESV is how are they financing the purchase of LFC? Lim's cash deal does sound safer. Plus, i don't see much from a stadium perspective ' just a commitment'..what on earth does that mean, we've heard that before...and anfield cannot be upgraded, simply not, will they still go for the new stadium? i've seen the redsox stadium and it's not exactly state of the, i'm still not convinced on the player funds....i think they'll be very diligent..rather then Man City type spending and frankly we DO need to spend BIG as our squad as we all know it lacking world class!

  • Comment number 13.

    Born Again is a WUM who constantly posts anti - Liverpool jibes and comments on the Liverpool boards.....hardly surprising him siding with the anti - Liverpool Hicks/Gillet debacle.

  • Comment number 14.

    Well set out David.

    H & G see themselves as selling acommodity, for which they want the highest price.

    Others see LFC as part of the fabric of the comunity with an intangible value.

    The two are entirely uncompatible....Man U will the next to go through this.

  • Comment number 15.

    Am I the only one who kind of wants H&G to win this case!?

    It seems to me that NESV are not the best people to sell the club to, and there is at least one other offer that is more attractive. Why didn't Broughton and his team consider any other offers?

    If Broughton etc. win this case then the club will be sold to NESV, and I'm not sure I'm Ok with that.....once bitten, twice shy!

  • Comment number 16.

    Nothing in law is ever simple, especially corporate law, and I would think there are many 'interpretations' of almost every sentence in those laws that QC's can debate for years.... that's how they make their money, so none of this may be as 'simple' as it appears. Neither are we fully aware of ALL factors involved in any given bid and the criteria being used to make final decisions on which bid is or isn't appropriate. But, the most frustrating thing of all is that our beautiful game has come to this.
    Money, wanted by players and owners, is grinding the people's game into the murky ground of greed and the game as a whole is suffering from it all. Just plain too much greed going on on all fronts.

  • Comment number 17.

    Good blog David.

    I'm normally critical as your style is to just pull together information that people following the story already know, but this seemed to make things a little clearer.

    It is ridiculous that a club can effectively be bought with debt. I'm sure Manchester United will have a more painful end to their current ownership structure.

  • Comment number 18.

    I hope that this gets settled today and that NESV emerge as the owners of LFC. Then H&G's farcical money making scheme will be no more and hopefully everyone can get their 'oar' out of the saga. Why Robert Peston felt the need to get involved and 'big up' the Lim bid is beyond me? He should stick to watching his Northern Rock shares...

    After all the dust settles, surely it is time for the FA to get up off their leather armchairs and sort out the rules governing ownership and running of clubs?

    The way H&G have immersed LFC in a 'labrynth' of debt and ultimately moved the ownership of the club "offshore" shows that tighter more transparent structures must be enforced such that 'the club' is one UK registered company and is allowed to have only 2 subsidiary companies managing the stadium and the team (if required)?

    Or is that a too simplistic view?

  • Comment number 19.

    to post #12.

    I agree with what your saying but NESV seem like business men (proper ones) that will look to keep the club running with controllable debt and will probably look to use the profit to invest back into the club, and i for one would be more than happy with that idea. hopefully a arsenal-esque business model would do me perfectly and I no my club has a future when UEFA set rules about living within your means.

  • Comment number 20.

    Frying pan into the fire? When the dust has settled and we start to recover as a Club, as supporters and as a community I hope that whoever ends up owning Liverpool Football Club will respect our history, heritage and global fan base and take us forward in a professional manner unlike H & G. I would not wish this saga on any club and can sympathise with the tortures Pompey fans have endured. I will say one last thing, Man U fans be afraid, be very afraid you will be next!!

  • Comment number 21.

    How did it get this bad? Answer? Tom Hicks. A bad man. Said he would respect traditions of the club. Then bragged to the Wall St Journal it would be his 'most lucrative deal ever', and likened LFC to Weetabix. Did the same with Texas Rangers ... bought them, spent a bit on players initially (i.e Babel, Torres) then starved the clubs of funds, and 'sweat the assets'. Now appears hellbent on using any trick in the book to delay the sale process so he can bump up his price. Should never have been let a million miles near the club. Gillett more of an enigma but barely comes out of this with any more respect, despite his occasional protestation that he wanted to do the right thing by the club.

  • Comment number 22.

    This is a wake up call for the Premier League that I fear noone will heed.
    The whole model of club financing and administration is deeply flawed. Clubs are NOT like normal businesses. Fans are not "customers" or "punters". They don't go looking round for the best offer or switch brands for a better quality product.
    As it is, every club in the Premier is open for sale to any huckster who comes along and wants to: a) make a load of money selling on, or b) having more money than sense, wants to acquire a plaything of which they may or may not get tired of depending on the results on the pitch.

    No thought is ever given to the possibility of reconverting the clubs back into "clubs", owned and controlled by the fans. Fans are not even allowed on management boards or considered or consulted over big decisions that affect the club's future.
    Liverpool is a case in point. The fans, the cutomers, the punters, are just helpless victims on the sidelines hoping that whoever buys the club is going to be nicer than the last owners. That there will be millions and millions to buy some star players. That ticket prices will be affordable, and that the merchandise won't be too exorbitant.

    Feudalism or what?

    Time for big changes, I think. Time for fans from ALL the clubs to get together and make their voices felt. A few games in front of empty stadiums (stadia?) would concentrate minds.

    I'm not an expert on the Bundesliga but I believe they have some of these ideas put into practice.

    Whatever the outcome of the Liverpool saga, it's clear that the whole Premier League system is unsustainable.

    I don't doubt that more than a few Manchester United fans will be watching events with interest.

  • Comment number 23.

    There has to be due process in getting this mess sorted out. Broughton and the Board know that G & H have to go as a priority, because they are bringing the club down. In light of this, the first offer of a purchase had to be accepted to start the process of getting rid of the Americans, the fact a better deal turned up later is largely immaterial. In any event, if NESV decide they don't want the club, they can always sell up later. As for the football, I think Liverpool should sell Gerrard, Torres and Reina, which will raise money for new, up and coming players, and should act as a warning to the rest that the responsibility to perform is theirs.

  • Comment number 24.

    It is ridiculous that a club can effectively be bought with debt.

    Purchasing with debt is the basis for the entire economy. Almost all companies are purchased with large debts. For example, if you buy a company for £1bn and sell it for £2bn, then you have made a 100% profit. However, if you only put £200m of your own money in and borrow £800m, but still increase the value by £1bn, then you make a 500% profit on it (less the interest rates. It's illogical for people to buy large companies purely on a cash basis (unless you have so much cash that it barely dents your reserves that is)

  • Comment number 25.

    It may even hinge on how 'best deal' is to be interpreted - H&G no doubt wanted the best deal for *them*, whilst Broughton was trying to get the best deal for the club, two totally different objectives.

    Worst case scenario now would be H&G winning, with Mill Financial taking over - I suspect their interest stops at retrieving the debt from Gillett, preferably with some profit.

    Of course whoever loses will then appeal, which means RBS may just press the nuclear option to shortcut the whole thing - of course we'll then see an injunction against *that*.

    It may yet turn out that administration is the only way to rid yourselves of Gillett, and if I was in the Scouse fans boots I'd consider that, along with the 9 point deduction, a small short term price for removing an otherwise long term problem.

  • Comment number 26.

    I'm not a Liverpool supporter, but this will be the only occation that you will ever get to send a loud and clear atatement to all those foreign idiots who think they can buy a sports club and can make money.

    The best would be to see that H&G loses everything thay have in LFC and Mr. Justice Floyd ensures that any future buyers should buy using their own cash and not borrowed money for the love of sports.

    However legality is something else!!

  • Comment number 27.

    For the sake of the game's image, I hope this is resolved as soon & as smoothly as possible. It won't be, though.

    The clamour for foreign ownership in football clubs completely baffles me - 9 times out of 10 you end up with morons like these two chancers in charge.

    The days of top tier English sides being owned by local businessmen with money to spend on their team ended when the Premiership started & fired turnovers through the roof. Now the clubs are being run the same way as most businesses with a £500m turnover - solely as a profit making vehicle for dispassionate commercial investors. More often than not, if somebody invests £100 million in a club it is because they are looking to earn £200 million out of that. Abramovich & Sheikh Mansour are a different tale, albeit still a worrying one.

    What Martin Broughton has done should be wholeheartedly commended; he has selected a potential purchaser who will purchase the club in the best long-term manner (i.e. not saddling the club with the takeover borrowings) and who is looking to the long-term success of the club, rather than short-term profit.

    Liverpool fans should not be looking for guarantees of "Man City type spending" or new stadiums, they should be seeking stability.

    Manchester United beware...

  • Comment number 28.

    9. At 08:25am on 13 Oct 2010, Born_Again wrote:
    IF (and it's a big if) the claims by H and G are true, then I side with them. If they've instructed their staff to find the best deal and they go with the worst, then they are right to sack them or at the very least block the sale.


    the "staff" are there to find the best deal for all parties concerned, mainly the club and not just find the highest bidder. The highest bidder will not necessairly be the best option [may not pass the ownership test for example] so to say they have potentially gone with the worst offer is ridiculous when you, nor I, nor David Bond nor anyone else outside of the negotiation meetings was nor is privvy to the finer details of the proposals.

  • Comment number 29.

    I still can't believe a club like Liverpool is in such a mess!! this clearly shows that Arsenal's business model is the way all clubs should run! I hope Liverpool don't go into administration because of stubborn owners who are clearly not wanted, they should cut their losses and sell for the good of the club and let Liverpool get back to where they belong! All clubs should sell/give a percentage of shares to supporters trusts so the fans can sit on the board and have a greater say in how their clubs are run!! I sincerely hope that the court backs the fans!!!

  • Comment number 30.

    #24 Excellent point well made, but isn't that the philosophy what has got the world wide economy in the mess it's currently in - piling debt upon debt is unsustainable in the long term and when it comes time to pay the piper and certain creditors (ie the general public as it's usually our money that's played with) need some back to pay the bills the whole thing crashes down like a set of dominos?

    How did it get this bad for Liverpool?..speculators took a gamble that backfired but from what it looks like will still come out of things okay, whilst the supporters are left picking up the tab from the next thief in the night.

  • Comment number 31.

    #27 ..... noted .......... I am not against foreign owners, but the EPL has to put their thinking caps ............... find out do they have the money? is it borrowed? how is the re payment??? for how many years?? etc, etc.

    I'm a MU fan!! shitting briks coz I know MU will be next without a doubt!!!

  • Comment number 32.

    # 24 arch_tomathy


    I was beginning to think I was the only one who recognised that!!

  • Comment number 33.

    'After almost five hours of submissions by a series of lawyers whose weekly wage packets might make Fernando Torres blush...'

    why the barbed comment? Yet another little example of BBC left-wing bias? These lawyers (perhaps he meant barristers) doubtless make good money, but nothing like Torres' reported £130k a week. Whatever the 'sports editor' thinks, the only questions that could be posed or answered in this case were those specific to the action brought by the appellant.

  • Comment number 34.

    i am amazed that the counter arguement to hick's patently untrue calims of exclusion from the sale were not published here.

    the home team phone line was actually for EVERYONE including hicks when calling buyers AND the fact was hicks and gillett left the meeting but had a lawyer on the phone all the time...

    this was not published here.

  • Comment number 35.

    All the moral highground around fans 'owning' clubs is fine, but who is going to take the loss on their investment, or write off debt?

    If Liverpool is 'worth' £320m, and there are (say) 30,000 season ticket holders, are they going to stump up £10,600 each for no return whatsoever?

    Once a club is on the highly leveraged slippery slope, there's no getting off it without going bust and starting again at the foot of the football pyramid.

  • Comment number 36.

    "How did it get this bad?"

    Simple: football is now a business, football clubs are ran like businesses, and with reference to post #24's well articulated breakdown, this thread's main question is rather obsolete.

    Why is it such a suprise that this happens nowadays? With the money at stake its always going to be messy. Liverpool is not the first and certainly won't be the last. United next? Possibly...

  • Comment number 37.

    I find it amusing that the pictures from outside the hearing of the Liverpool fans show them dressed in the new club shirt - therfore adding money to the coffers of the much hated owners. Isnt it ironic? Dont you think?

  • Comment number 38.


  • Comment number 39.

    There have been several comments on here about greed, mostly about the greed of owners trying to make a profit.

    Is there another kind of greed that opened the door for big investment: the greed of fans who want their club to be dominant over a seemingly endless time-period, rather than take its turn in the system that made foootball magic in the first place, whereby many, many clubs felt they had a chance of the ultimate prizes?

    There's also been a fair bit of comment about Americans. At least in the big US sports leagues there are (imperfect) systems to keep some kind of wide competition alive by things like giving the low-finishers first choices on new players.

    Beyond this, is it valid to say that keeping the footballing heritage alive would include a spell for Liverpool in a lower division to rebuild from the debacle of the over-mighty and ultimately unsustainable ambition of its fans? Or is Liverpool Football Club now irreversibly a global brand that the fat cats at SKY and the PL cannot afford to slip backwards, rather more than it is either a plaything of its owners or the property any longer of the fans in the local community?

    Have Liverpool fans perhaps got what they deserved?

  • Comment number 40.

    In the good old days it used to be basic simple tax .......... now over years the system has changed. e.g. if you do this you pay this but if you do that you pay that, however u do this and this u pay this!!!!

    It all boils down to tax, these guys dont want to part with their money to the government and now are exploting every loophole available to them not only avoid paying tax but also double their asset in another country being called "An Investor" .......... there is so much to read in between the lines of investors these days

  • Comment number 41.

    LFC, LAFC, Kop Holding Ltd, Koop Football holding Ltd ... etc etc ... if somebody is not careful, they will end up paying £300m for KFC

  • Comment number 42.

    Some questions require addressing:
    All the negative comments about H&G may be true or not, but they are in terms of the law irrelevant. H&G are the owners , through corporate means, but owners nevertheless. How is it that they appoint and pay the salaries of Broghton, Ayres etc and yet get back stabbed by their own appointees? Have H&G been foolish in their trust of the people they appointed to run the LFC board? Regardless of how the fans view them, are not H&G as owners morally right to rid themselves of these same employees who have acted against the interest of the present owners of the club ?
    Might not Broughton, Ayres etc be seen to be ethically wrong offering their loyalty to the new potential owners (NESV /LIM) against the wishes of the present owners who pay their salaries? Have H&G been foolish to hand over so much power to those who now act against their interests?
    The news we read now that better offers (LIM/MILLHOUSE) have been made for the purchase of LFC that would have improved the present owners financial position were ignored or side lined by this same board. Does this not suggest that H&G are not the real villains here. We need to look to some board officials with personal agendas for personal profit motivations from their not too transparent recent actions?

  • Comment number 43.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 44.

    #39 curiousclaret

    "Have Liverpool fans perhaps got what they deserved?"

    That's a matter of opinion, but they have certainly got what they asked for when Moores was in charge. A thoroughly decent man who had Liverpool FC's best interests at heart. His only "crime" was that he wasn't prepared to fling hundreds of millions at the club. Managed to win the Champions League, though.

  • Comment number 45.

    #24 your point is valid but surely the FA/EPL need to put a restriction on how much of the buy out price can the leveraged against the club.

    The court ruling went in our favour but I fear these Americans will do the exact same thing. Initially invest in the squad and probably draw up plans for a revised new stadium that will never get built. I hope I'm wrong. It could be worse United are in bigger trouble than us.

  • Comment number 46.

    How fickle can Liverpool fans be?

    "Get Yanks Out", "We hate Americans, they know nothing about football" etc..

    Another richer Yank comes in and he is the saviour!

    Let's stop giving them headlines for this because they can't get headlines for their football!

  • Comment number 47.

    #42, it wasn't Gillett and Hicks that appointed Broughton, well it was but it was because they were forced to by RBS as part of the last loan extension. From what I understand RBS were less than impressed by H & G's attempts to sell the club so they wanted to bring someone in who would speed up the process. So Broughton hasn't been acting in the best interests of the owners, but if it was left to the owners to carry on as they have been the club would be a lot closer to picking up that 9 point penalty. H&G bought the club with money they didn't have and haven't been able to keep up with the repayments which is why the control of the club has effectively been taken out of their hands and why Broughton and the others were put on the board. Broughton's not there to act in the owners best interests, he's there to do what's best for the club and for RBS. Well that's the way I understand it anyway, and by the sounds of things the way the Judge has understood it to.

  • Comment number 48.


    Perhaps Mr Bond was making the assertion that Torres might "blush" at the thought that they are on considerably LESS money than he is???

    For doing what is, in effect, a much more important job?

    I don't think we should accuse the writer of left-wing bias. You're just trying to read into it what you want. All statements can be taken 2 ways.

  • Comment number 49.

    This is a worrying development. Taking the emotion out of the equation, what we seem to have now is a precedent for a situation where a bank can appoint a loaded board to essentially steal a company from its legal owners without compensation. Guess what, the bank makes sure its own investment is secure by telling its placemen to sell for a figure that just covers the money it is owed but leaves nothing for the owners. Amazing how suddenly, because they got the end result they wanted, everyone likes those nice cuddly bankers again...

  • Comment number 50.

    I find it absolutely staggering that in the photo you show of Liverpool fans outside the high court, that the gentleman on the far right is wearing the latest shirt, despite their being a boycott from the hardcore of the club to reduce the funds that go to Hicks and Gillett. Some fans really are a headache.

  • Comment number 51.

    I have very little sympathy for anyone apart from the tax payers that are now footing the bill for this rediculous charade. They lived by the sword and now they have fallen on it. I don't remember any supporters complaining when Liverpool were wasting money on Robbie Keane and spending extravagant amounts on Glen Johnson etc.

    Hopefully more clubs who aren't already too deep in debt will use Liverpool FC as the cautionary tale it is.

  • Comment number 52.

    Suck it up! Hilarious, the whingers.

    The BBC must be gutted with this decision.

  • Comment number 53.

    H&G seem foolish to have allowed the contract to allow Broughton to sell the club to, basically, anyone he wanted. Others seem to have been offering more so H&G are understandably brassed off.

  • Comment number 54.

    I think Liverpool fans are deluding themselves if they think H&G going will make a massive difference to the team. They have quality players, and are stil in the bottom 3. They, at the moment, are paid well and still not good enough. What happens after the takeover and the belts are tightened? Look forward to playing you next year. Leeds fan ;-)

  • Comment number 55.

    #47 What you say sounds reasonable. Puts it in a different light perhaps. But at the end of the day it still feels like my wife has sold my 14O mill (?) fleet of Ferraris against my wishes , not to highest bidder and worse to folks I wouldn't want to have em.
    Was RBS able to force H&G to sign over so much power, or were they plain dumb?

  • Comment number 56.


    If you can't pay for your Ferraris, you don't get to keep them.


  • Comment number 57.

    Well hopefully this is the near end of a very grubby affair. I don't think anyone comes out of this smelling of roses - apart from Broughton. David Moores should be thoroughly ashamed of himself for selling the club to those two Del Boys in the first place. They really do appear to be slippery chancers. Hopefully the deal with NESV will now go through without too many shenanigans, they appear to be 'proper' businessmen. Liverpool need a period of stability now, no stupid spending, just financial stability and stability in the board room, oh and a win at the weeken. Man U - watch and learn.

  • Comment number 58.

    49. At 11:26am on 13 Oct 2010, Mark Thomas wrote:

    This is a worrying development. Taking the emotion out of the equation, what we seem to have now is a precedent for a situation where a bank can appoint a loaded board to essentially steal a company from its legal owners without compensation. Guess what, the bank makes sure its own investment is secure by telling its placemen to sell for a figure that just covers the money it is owed but leaves nothing for the owners. Amazing how suddenly, because they got the end result they wanted, everyone likes those nice cuddly bankers again...

    Welcome to the world of capitalism and investment where these things can and do happen. H&G knew what they were getting into when they bought LFC, when they took the loans out, and when they signed into the agreement that gave Broughton the power to sell the club, if they didn't realise what they were doing then they're guilty of gross incompetence.

    Long story short, H&G made an investment in LFC hoping for a return, that hasn't happened and now they're being called in for borrowing so much money and almost certainly going to be left with nithing. Any time you make an investment you take the chance of losing your money, that's the way the system works.

  • Comment number 59.

    Good blog as usual forget the detractors, who are perhaps envious your grasp of the issues at hand, and this statement sums it up,

    "The labyrinthine company structure created by Hicks and Gillett, consisting firstly of the club, Liverpool (LAFC). It was revealed that RBS is owed £97m by this company which breaks down as a £25m general facility, £52m for players and stadium investment and a £20m revolving facility. Above the club there is Kop Holdings Ltd which owes RBS the £200m main facility. Then there is Kop Football Holdings Ltd. This has security over the assets of Kop Holdings and LAFC. Above that is Kop Football Cayman Ltd and then Kop Football LLP, an American company registered in Delaware. It is this company Hicks and Gillett own 50/50".

    I am not quite sure how many LFC fans would tell the difference between Kop holding and Kop football holding, so thanks once again for the enlightenment.

  • Comment number 60.

    To say the bank has appointed a loaded board and stolen the company from its rightful owners is a gross misrepresentation of the facts. Hicks and Gillette were dragging their feet over a sale, holding out for a ridiculous £600 to £800 million. Yet their repayment to RBS was overdue. Therefore, they agreed, as a condition for the repayment term being extended, that the board should be re-constituted. They knew they were in the minority when they signed the side letter.

    As of last Tuesday there were only two credible offers on the table, from NESV and Lim. Mill Finance had ruled themselves out by demanding exclusivity. Broughton, Purslow and Ayres decided that NESV was the better bet, presumably because of its greater experience in running a sports team. (Lim was yet to make his increased offer, which we can now see was made purely to muddy the water and leave him as the sole bidder should the case have gone in favour of H&G).

  • Comment number 61.

    #56 ... ur bang on ...... However, 2 wrongs wont make a right.

    The bank has a say coz they borrowed money on a re payment plan which they didnt keep to and the debt kept accumilating. Now the owners are unable to repay. So bank gives deadline for repayment or face takeover.

    Its simple as that .... it can happen to you when you cant pay for morgage. You have lost money that you have put down.

    However, isnt there something which enables the owners to get something if the bank gets their price and whatever is over that price???

  • Comment number 62.

    #55 RBS already effectively owns LFC through the secured loans owed to them. G&H begged for an extension and RBS agreed (they could have put LFC into administration there and then) as long as their conditions were met. Those conditions include appointing someone who could secure a sale to pay off the money owed to RBS. There was nothing in it about G&H getting anything.

    IOW, G&H were desperate for time in the hope that some magical bidder would appear reading to pay their 600million+ price tag. They agreed to the deal because they had no choice. Now their time is up.

  • Comment number 63.

    A lot has been said about whether H&G were fit owners and whether the previous owners of LFC did all that was needed to ensure that H&G were suitable, but there is one other party that had a responsibility to ensure they were fit , and that is the Premiere League (or FA). When a club goes into administration, the owners lose the club, the supporters and players are deducted points, but what punishment does the league suffer ? The league should not be finding potential owners "fit" and allowing clubs to be sold to them, then penalising the club (and fans)when things turn sour, while it is not held accountable. How can they justify finding H & G fit in 2007 and just 3 years later the club is potentially bankrupt. Previous owner (? Mr. Moore) like every other person has a responsibility to himself only and is in business to make profit. His only concern ,and rightly so was: can H&G pay what i am asking? The league/FA though has a responsibility to ensure that any sale will not harm the league which includes all other teams. A soccer league is simple: play games, score goals,earn points, most points win...there is no boardroom or bank or contracts but if a points deduction occurs does it not devalue the competition ? Liverpool are 18th out of 20 teams (or 12 points of the top with 31 games to play ) the end of 38 games if Liverpool are runners up to Man. Utd. by 8 points after a 9 point deduction, will Man. Utd overtaking Liverpool as most championship winners have the same value ? Ask Sir Alex if thats how he wants to win the record? The point that i am making is that the league should be accountable.. if it can be proved that the league erred in declaring potential owners "fit", they should face some penalty and all penalties paid by clubs in administration should be "off-field" financial penalties, not points deductions or relegation because such action taints the competition and makes a mockery of 9 months of hard work by players, coaches, television networks, supporters... Everyone wants to be the best... by beating the best on a level field...deucting points does not allow that.

  • Comment number 64.

    Are you now going to write another blog on how it turned out so good for liverpool?

    Ok maybe its overly optimistic at this stage but with the toxic debts and clueless owners seemingly gone, new owners queuing up to own a business with one of the largest most powerful brand names on the world market for a considerably reduced price [yes G&H were right about one thing liverpool as a brand and business is worth much more]The future looks brighter as the lowered price will allow for greater spend on improving the club from the ground up, i.e. team and stadium and moving into the new world of elite football...hopefully.

    Anyway Liverpool are hopefully on the right track, and with our brutal finances being sorted coupled with our brutal team at the moment, the only way is up so here is one fairly happy red for now.

  • Comment number 65.

    ps in effect G&H didn't really own liverpool, RBS did and they wanted their money. Good night and good luck.

  • Comment number 66.

    Susan B. Anthony, Thomas Edison, Benjamin Franklin, Thomas Jefferson, John F. Kennedy, Martin Luther King Jr, Abraham Lincoln, Charles Lindbergh, Paul Revere, George Washington, Buffallo Bill Cody, Harry Houdini, Tom Cruise, George Bush, Bill Gates, Steve Jobs, Michael Jordan, Diane Fossey, Barack Obama, Muhammed Ali, Babe Ruth, John Grisham - YOUR BOYS TOOK ONE HELLLL OF A BEATING!

  • Comment number 67.

    The sad thing is, as I understand it, NESV will need to borrow the money to finance the purchase although I gather it will be structured in a different way to Manchester United (ie Liverpool do not own the debt).
    It does beg the question though that interest rates have been at their lowest, for the longest period, since the year dot. What will happen to all these debts if interest rates flick up to 4 or 5 percent, which is within the realms of possibility. Oh I just wished English football was back where it was just 20 years ago but the greed within the game is to blame. When there wasn't these fat TV deals the clubs couldn't afford to pay players stupid money and real owners could afford to run a football club.

  • Comment number 68.

    Great news.

    Let's hope that Liverpool fans (and fans of other similar clubs) will have learned the obvious lessons of dubious foreign ownership.

  • Comment number 69.

    "The sad thing is, as I understand it, NESV will need to borrow the money to finance the purchase although I gather it will be structured in a different way to Manchester United"

    Simply not true.

  • Comment number 70.

    Frying Pan and fire anyone?

  • Comment number 71.

    "Frying Pan and fire anyone?"

    Massive sour grapes, anyone?

    Pathetic. Just like most of the know-nothing comedians which infect these blogs.

  • Comment number 72.

    "Have NESV actually got £300m in cash or will they be taking out a loan to buy LFC?"


    None of these people got rich by spending their own money.

  • Comment number 73.

    Nice blog David that makes the whole situation much clearer.

    @ 49: what happens when a "home owner" is unable to keep up their mortgage payments? I don't think the lending bank's prime concern is realizing a profit for the borrower, but in recouping their money. One must hope, for Liverpool's sake, that the bank appointed administrators take the long-term future of the club into consideration, but as other posters have pointed out, merely selling to the highest bidder is not the responsible way to go.
    This serves as a timely warning to all those who use debt to finance their ventures. You are only proxy owners and the real power is in the hands of the bankers.

  • Comment number 74.

    @ 66: What on earth is this meant to be?

  • Comment number 75.

    Unfortunately most fans have no influence over who their club is sold to. Nobody knows what any new owner will do once they are in control, except for covenants placed on the club by the seller. In Liverpool's case, David Moores was only interested in the cheque, so didn't bother. I'm amazed he still has the cheek to have KOP 1 as the reg plate on his Roller!
    Hopefully, the Premier League will learn from this and ensure that any debt for purchasing any club stays with the buyer and cannot be transferred to the club.

  • Comment number 76.

    David Moores had the right to sell his property (Liverpool FC) to whoever he wished. What he shouldn't have done was claim that he was selling it for the club's benefit.

  • Comment number 77.

    @ 74 it's a joke........if you've followed England for a while you might get it......

  • Comment number 78.

    For Mortimer and Randolph Duke, aka H&G. Overheard at the High Court....

    Broughton: "Hey, how'd y'all make out today?"

    H&G: "Broughton? Liverpool? How could you do this to us after everything we did for you?"

    Broughton: "Oh, see, I made Liverpool a bet here. See, Liverpool bet me that I couldn't both get rid of you and put y'all in the poor house at the same time. They didn't think I could do it. I won."

    Liverpool: "We lost......looking good, Broughton!"

    Broughton: "Feeling good, Liverpool"

  • Comment number 79.

    Hopefully, Liverpool now have owners and a board that know how to run a business and will employ people who know how to run a football club.

    We can blame H&G for the finacial mess but we can't blame them for the football mess. With a few notable exceptions, the squad assembled by Rafa was full of journeymen (albeit expensive journeymen!!). Most of the current squad would not be taken by any of the contenders in the PL.

  • Comment number 80.

    H&G are getting what they deserve clearly; Liverpool fans as well...

    Anyone who supports H&G's lust for a higher bid is missing the facts. It makes sense to them of course, but they live and die in a world motivated by greed.

    I'm an American, I lovvvve Liverpool. I would type the whole song here to unveil my passion if I had the time. I can assure all you fans across the Atlantic that NESV may not be paying the right price for H&G, but they are paying the right price for the supporters of the club. I also happen to be a motivated Red Sox fan, have been my whole life(28yrs). Since they took over they have won titles, competed for titles, signed big players, developed great players, installed competent and innovative management, that have taken the institution as a whole to greater places that long time supporters only dreamed of!

    I am exhausted at the length of the proceedings, and while I havent been a supporter of Liverpool as long as the Red Sox, I am a supporter of the game and have fallen in love with Anfield.

    So I wish us ALL the best in the coming days, and Torres is about to go nuts, you'll see :)

  • Comment number 81.

    Sickening verdict for H & G.
    £144m! OUCH!
    Frustrating though they are I don't liken either to the Anti-Christ as some do.
    Their undoing was more timing than greed - the worst recession since 30's scuppered all their plans. If we were still enjoying a boom then the stadium would be built and songs eulogising H & G would be cascading down the (new) Kop.

  • Comment number 82.

    @72: The question isn't "will they borrow to finance buying Liverpool?" The question is "will they use a leveraged buy-out where they buy the club then saddle it with the debt, or will they borrow the money and keep it on their own balance sheet? If it's the former, then I'd be worried. If the latter, it's not an issue.

  • Comment number 83.


    mmmm, aint NESV from the same place as all they people you just mentioned? So the yanks have been put down so that a sale can go ahead to thé.......more yanks.

  • Comment number 84.

    "Perhaps the most telling part of Mr Justice Floyd's judgment came when he spoke of the substantial damage he would have caused to the football club had he ruled in favour of Hicks and Gillett."

    While I'm happy for Liverpool fans and hope their club gets out of the mess it's currently in, it does worry me slightly that the judge appears to be making his decisions based (at least partly) on the consequences of his ruling rather than simply by the letter of the law.

  • Comment number 85.

    I can see this sale backfiring not too long down the line when NESV realise all they've bought is ancient history.

  • Comment number 86.

    Closing the deal with NESV after Hicks had reconstituted the board was a really stupid thing to do.

    The negotiations should have been put on hold while the court drama played out.

    Now LUFC find themselves in a bit of a sticky situation. They know that the board can be legally reconstituted as it was, but they don't really know whether the deal with NESV is legally binding. This is a problem, since if that deal is not legally binding, they now have a responsibility to examine other deals. This will undoubtedly annoy NESV to the point of legal action if another offer is preferred. On the other hand, treating the deal as legally closed and binding will lead to further legal action from Hicks and Gillet, who will claim that they are ignoring the better offers.

    If they had just been open with RBS and NESV about what was happening and put the deal on hold, this situation could have been averted.

  • Comment number 87.

    Perhaps Waldorf and Stadtler can now go back interjecting from the sidelines in the proper Muppet Show?

  • Comment number 88.

    "Now LUFC find themselves in a bit of a sticky situation."

    If you're going to try to be clever, try not to make a complete moose of yourself, eh?


  • Comment number 89.

    TheJudger (LOL)

    You really are a bitter little individual, do you not have a team of your own to comment on. You troll these boards looking to have a go at Liverpool at the least opportunity.

    Anyway, cautious optimisim about the future. and before nyone goes nuts saying I allude to winning titles in the next 12 months THAT IS NOT what I am saying. I am stating that the club looks in better hands

  • Comment number 90.

    bet hicks is kicking himself, looses LFC with his "slippery tactics" i watch a lot of baseball, i am SF Giant fan, do not like the red sox, but thats just a team thing. hicks dragged the texas rangers ownership thru the mud, had to sell them, they were freed from his meddling claws early this year, taken over by a consortium headed by nolan ryan, and the rangers beat tampa bay last night to advance to the ALCS for the first time ever, they now face the yankees (booo). my point is they were freed from him, now our club will be free from him and his bit part side kick, even thou his 50% is now owned i believe by mill financial, texas moved on, Liverpool can now move on, without the ridiculous amount of debt round our neck.

    YNWA...apart from H&G, you can walk alone in the valley looserville!

  • Comment number 91.

    So there was a phone auction between NESV and Lim - Lim lost.

    Prior to that Mill Financial wanted to bid...but didn't want to be part of an auction - which was against the rules of the sales procedure.

    Lim, after losing the original auction and now knowing what the other side his offer (even though the auction is now over).

    So Broughton et al did go with the best bidder (at the time), whilst following the rules laid down by RBS to ensure the sale of LFC.


  • Comment number 92.

    Hicks had no right to re-constitute the board, as he himself has already admitted to the Court. It was Hicks and Gillette who refused to participate in the meeting, once their risible attempt to install their own stooges had been refused. The deal with NESV is legally binding. The other "offers" are irrelevant - they've already been considered and found wanting.

  • Comment number 93.

    @86 - The period for bids ended last week. The meriton bid was classed as credible, but that the NESV bid was better. I don't see what has changed. Mill Financial and Peter Lim, and the 130 other interested parties all have to follow the same rules. Bids submitted by the deadline were considered, the board picked the one it thought best. Just because a court case delayed the sale, doesn't mean the deadline was extended, so any bid subsequently received can be discounted.

  • Comment number 94.

    To 'Coalitionofthewilting'

    Houdini was not American!

  • Comment number 95.

    I don't think that NESV are going to be the answer to all our dreams, but they appear to be responsible owners, with sound financial ability, and a track record in sensible investment in teams and infrastructure.

    All we wanted was someone to help us build a new stadium, so that we could reap the rewards of being a well-supported club. If NESV achieve that, we'll be extremely happy.

  • Comment number 96.

  • Comment number 97.


    Basically nothing is done, except to determine what everyone already knew, the club was going to be sold. Specifically the people who needed to say the NESV deal is done, didn't say it was done. Although NESV made it clear if the deal isn't done, they'll be looking for damages.

    This was just the appetizer course, we still have the main dish, and quite possibly some afters on the way...

  • Comment number 98.

    As an ABL (Anyone but Liverpool) all I'm interested is when they're going to get docked points ;-)

    Great opportunity when they get relegated to finally win a League after so many decades.

  • Comment number 99.

    to 63.

    that is by far the best argument i've read anywhere, contentesting the ridiculousness of the points-penalty rule. i completely agree with you.

    regarding the blog, i find it irritating mr bond leaves out so much salient information about the court proceedings, especially lord grabiner's masterful execution, item by item, of every assertion made by H&G's counsel. this omission just leads to more silly comments based on an ignorance of the facts.

  • Comment number 100.

    Good to see some common sense in the courtroom today. I hope that this is the beginning of a period of stability for Liverpool Football Club and their fans.

    As for the Lim bid, this is probably a red herring, the bids were already considered and the deadline passed - NESV were the winners.

    As for the stadium, NESV are being understandably coy - they will need time to examine the plans and the need for themselves. They have a history of building new stadia and re-develolping existing stadia with successful outcomes though. Liverpool fans will just need to sit tight and wait. The one thing they will hopefully get is a club free of debt which can possibly spend a bit come January (not in the same league as Chelsea or Man City of course) to at least get a reasonable finish this season.

    Whatever happens I don't think that Liverpool are looking at instant success, more of a solid grounding to build success, which I think it is better for their long term fitness as a club.


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