EPL Runt proves his worth once again !
Why is a court case required to push this through?
If Broughton was given sole control over who sits on the board, as he said he was by Hicks, Gillett and RBS in agreement, then surely their efforts to remove Purslow and Ayre should just be dismissed straight away.
There is more to this than meets the eye and nothing is for definite until after that court case.
Administration beckonsâŚ
Liverpool could face points deduction
Liverpool are likely to face a nine-point deduction if parent company Kop Holdings goes into administration.
League rules say a deduction can be applied if a parent company insolvency is caused by the clubâs management.
Sources suggest Liverpool will struggle to argue the running of the football club by owners Tom Hicks and George Gillett had not affected Kop Holdings.
Liverpool could enter administration if a sale to the owners of the Boston Red Sox is not completed by 15 October.
If Hicks and Gillett manage to block a ÂŁ300m takeover of the club by New England Sports Ventures (NESV), their holding company could be put into administration by the Royal Bank of Scotland as a result of their ÂŁ280m debts.
The Premier League board, which comprises chief executive Richard Scudmore, chairman Sir Dave Richards and secretary Mike Foster, would then decide whether to dock points.
Liverpool are already in the bottom three of the Premier League after a dismal start to the season, amassing only six points from their opening seven games.
Initially, it was thought the Reds would avoid a points penalty but the club now faces the very real possibility of a deduction if a sale to NESV is delayed.
Liverpoolâs fate rests on the outcome of a declaratory judgement in the High Court next week over whether the club can be sold to NESV despite the objection of the clubâs owners.
An appeal is likely regardless of the High Court ruling, with no outcome likely before the 15 October refinancing deadline set by RBS, the clubâs major creditor.
RBS will have the choice to waive their demand for repayment until the legal dispute is finalised, or call in the debt and place the parent company into administration.
Portsmouth became the first Premier League club to enter administration earlier this year and automatically received a nine-point reduction, condemning them to relegation.
In a similar case, West Ham avoided a penalty when their holding company went into administration in 2009.
That is because the London club was just one of several interests in the portfolio of Straumur, the Icelandic bank.
However, also in 2009, Southampton were docked 10 points by the Football League after their parent company Southampton Leisure Holdings went into administration, as a League investigation found they were âinextricably linked as one economic entityâ. That was a decision taken by the Football League rather than the Premier League.
Meanwhile, John W Henry and the other directors of NESV are expected to pass the leagueâs new âowners and directorsâ test, making official approval of the takeover a formality.
Whereâs that quote from?
Are Liverpool going to do a Leeds on it?
Nah. This wouldnât even have arisen if it wasnât for Gilett and Hicks abandoning all pretense of basic human decency.
Incidentally Liverpool are into 12/1 to be relegated with Skybet
I thought I read somewhere else that Liverpool would not be deducted 9 points if they go into administration. The Premier League hasd assured them actually.
The proposed new owners have passed the Premier League check so hereâs hoping the sale goes through and any danger of administration is avoided.
Liverpool scouts looking for four first-team players
Liverpool scout Jakob Friis-Hansen has revealed the club have instructed him to help find four new first-team players ahead of the January transfer window.
The Anfield club are currently awaiting the outcome of next weekâs High Court hearing, which will determine whether New England Sports Ventures can complete its takeover of the Merseysiders. Should current owners Tom Hicks and George Gillett successfully block the deal, Liverpool could face administration.
However, the Reds are confident that a new era looms, and Friis-Hansen revealed he is not back in his homeland scouting young talent, because he has been asked to focus his attention on finding first-team stars.
âThe results are now important in Liverpool, it is first priority to get four prominent players in the next window for the first team. Players who can go into the starting line-up,â he stated in bold.dk.
"Roy [Hodgson] will hopefully get some money to work with. I will work in Italy, Germany, France, Belgium and Holland and will this year also be going to Spain for Liverpool and it is solely for the first team.
"It is a shame for Roy to get such a start, for there is no doubt that he is a really good coach. But it has been a tough start, because you did not know and still do not know what will happen with the club financially.
"I can hopefully go out and look at players in the highest price category at a time. But we will see.
Different co. Kop Ltd owed money
Interesting piece hereâŚ
Liverpool chairman Martin Broughton seems to have finally found a viable bid for the club. But do shareholders Tom Hicks and George Gillett have the power to block the deal? Legal expert Bernd Ratzke discusses the likely outcome of next weekâs High Court challenge
Liverpool FC co-owners Tom Hicks and George Gillett have a tough battle on their hands. The American duo, shareholders of Kop Football (Holdings) Limited, will take their case to the High Court next week in an attempt to force the board to abandon its plans to sell the football club to New England Sports Ventures (NESV). Hicks and Gillett are unhappy with the ÂŁ300m offer on the table from NESV, which would represent a loss of around ÂŁ140m on their original investment, once the Royal Bank of Scotland, the principal creditor, has been paid.
Although they are the major shareholders, Hicks and Gillett are outnumbered on the board, which voted in favour of selling the football club. On Wednesday, Hicks and Gillett tried to reverse that decision by attempting to sack managing director Christian Purslow and commercial director Ian Ayre.
On the face of it, the Liverpool board, chaired by Martin Broughton, is acting correctly. Kop Football (Holdings) Limited is deeply indebted to the Royal Bank of Scotland, which holds a legal charge over the shares in the football club. The bank has now demanded repayment of its facilities and has set a deadline after which it will exercise its security. That deadline offers Hicks and Gillett very little room for manoeuvre.
The boardâs legal obligations are clear. It must follow whatever course of action is most likely to see Kop Football (Holdings) Limitedâs creditors repaid and, once they have been dealt with, to account for any residual value to its shareholders. That the residual value of Liverpool FC amounts to a loss doesnât alter the boardâs duty.
The bank has made clear its intention to exercise its security if its facilities are not repaid by the deadline. For the football club, that would mean going into administration. Under FA rules, administration brings with it a points penalty that would threaten the clubâs Premier League survival, thus putting at risk a valuable revenue stream and no doubt significant sponsor support. If relegated, the value of the club would be severely diminished.
The trick therefore is to keep the club playing and to sell it as a going concern. The way to do that is to sell the subsidiary through which the club is operated for cash and to pay off the bank, with any balance being left in Kop Football (Holdings) Limited for the shareholders. There is no question here of the company being sold off without Hicks and Gillettâs consent. What is happening is that the board are converting Kop Football (Holdings) Limitedâs major asset into cash. The shareholders will get whatever is left. If that represents a loss, it merely reflects the poor performance of the company in which they chose to invest.
So will the High Court halt the boardâs current plans? It seems unlikely. Section 172 of the Companies Act 2006 lays down a general dutyâso far untested in the courtsâfor each of the directors to act âin the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a wholeâ.
The section goes on to lay down six further criteria: 1) The likely consequences of any decision in the long term 2) The interests of employees 3) The need to foster good relationships with suppliers and customers 4) The impact of the companyâs operations on the community and the environment 5) The desirability of the company maintaining a reputation for high standards of business conduct and 6) The need to act fairly as between members of the company. Itâs important to note that the duties prescribed in Section 172 are owed by the directors to the company, not its shareholders.
Hicks and Gillett face at least two hurdles. First, in appropriate circumstances, the duties owed to the company under Section 172 become duties owed to creditors. Assuming administration is inevitable in the event of the company being unable to meet its obligations to RBS, it is hard to see why the interests of creditors would not prevail.
Additionally, a sale of the football club as a going concern seems more likely to safeguard the interests of its employees than a break-up. Although Hicks and Gillette could argue that the holding company itself has no employees whose interests need to be considered. In addition, loyal fans might also take the wider view that new owners would do much to enhance the football clubâs prospects.
There are two further arguments to consider. It is not for the courts to make decisions that fall within the remit of company directors. So long as a director has acted reasonably, having considered all relevant factors, any decision he or she takes will be justified. It is irrelevant whether that decision proves right or wrong. What matters is that directors reach decisions for which they are willing to be accountable. This appears to be the case with the board of Kop Football (Holdings) Limited, which has taken plenty of advice and is quite willing to stand by its decision.
Earlier this year, binding undertakings not to change the composition of the board were demanded from Hicks and Gillett when RBS agreed temporarily to extend its facilities to Kop Football (Holdings) Limited, so attempts to oust Purslow and Ayre from their executive roles are unlikely to succeed. It rather looks as if the deal with the Red Sox owners is set to go through
I can only hope that during this fiasco which will hopefully end with points deduction that Roy Hodgson decides to flee. Then with breathtaking irony the utter cunt of a man Martin oâNeill who refused to work under a budget at Villa takes over at Anfield.
Court case fixed for tomorrow. Liverpool are already in default acc to bloomberg and could go into administration at any moment.
Liverpool to receive new bid from Singapore billionaire
By Robert Peston
Business editor, BBC News
The bidding contest for Liverpool FC may not be over, the BBC can reveal.
The runner-up in the contest, Peter Lim, a Singapore billionaire, is to approach Liverpoolâs board with a view to making a higher offer for the club.
According to sources close to Mr Lim, he was the clubâs preferred bidder in the closing stages of the auction.
He had talks with Liverpoolâs chairman about how to announce his takeover, such was the apparent confidence that he would win the contest.
âNo loansâ
Mr Lim learned he was not the victor only a few hours before the clubâs chairman, Martin Broughton, announced on 6 October that Liverpool would be sold to John Henryâs New England Sport Ventures for ÂŁ300m.
Mr Lim, who is being advised by the British firm of lawyers Macfarlanes and by the Wong Partnership of Singapore, still does not know why Mr Broughton went with New England Sports Ventures, owners of the Boston Red Sox.
He believes that in purely monetary terms, his offer was at least as attractive as Mr Henryâs.
Mr Lim, too, was offering to repay all of Royal Bank of Scotlandâs and Wachoviaâs ÂŁ200m of long-term debt, to take on ÂŁ60m of other debt and to inject ÂŁ40m of working capital.
Whatâs more - and Mr Lim regards this as crucial - all the money being provided by him would come from his own cash resources. He is not planning to borrow any of it.
I understand he is also offering to provide tens of millions of pounds to Liverpoolâs manager, Roy Hodgson, to allow him to buy players when the transfer window opens in January.
According to executives close to Mr Lim, he was told by Mr Broughton that his ability to fund the takeover for cash, and the size of his cash resources, meant he was a more attractive owner than New England Sports Ventures.
Mr Lim was told that Liverpoolâs board was concerned that New England Sports Ventures would have to borrow to finance the takeover - raising questions about whether Liverpool really would break free from the financial shackles perceived to have been imposed by the current owners, George Gillett and Tom Hicks.
In the event, New England Sports Ventures have insisted it will not load up Liverpool FC with debt.
But there are no guarantees that there will not be significant debt further up the corporate ownership structure of New England Sports Ventures - which could limit how much money Mr Henry and his colleagues can inject into Liverpool in the future.
Mr Lim is keeping a close eye on the court case, which starts on Tuesday.
The case is supposed to rule on whether Mr Broughton can sell Liverpool to New England Sports Ventures against the wishes of Mr Hicks and Mr Gillett.
The Singapore billionaire believes the judgement in that case may give him an opportunity to bid again, whatever Mr Broughton may wish.
Business empire
Mr Lim is also prepared to buy Liverpool, should it ultimately collapse into administration under UK insolvency procedures.
According to sources close to him, he feels that he may have been shut out because New England made an offer to Royal Bank of Scotland to pay some of the ÂŁ40m penalty fees the banks have demanded.
If that is the case, he believes Royal Bank may have done a poor deal, because he would be prepared to pay RBS and Wachovia more than the ÂŁ10m or so which New England Sports Ventures is said to have put on the table.
âHe never had a chance to negotiate directly with Royal Bank [of Scotland],â said a source. âHe was expecting to do so, after agreeing the takeover with the board.â
Mr Lim has an estimated net worth of $1.6bn (ÂŁ1bn), according to Forbes Magazine.
He made his fortune in fashion, logistics and agri-business.
His interest in English football stems from his ownership of several Manchester United themed bars in Asia - which have persuaded him that there is huge global potential for making money from top-flight English football.
Meanwhile, Royal Bank of Scotland announced on Monday afternoon that it had obtained an injuction to prevent Liverpool owners Tom Hicks and George Gillett from sacking Martin Broughton or any other of the clubâs board members ahead of Tuesdayâs court case.
I am always wary of these failed bidders going public. There must be a reason why Broughton went with New England.
What kind of a statement is that farmer. Thereâs a reason for anything anyone does. Could you elaborate?
Basically I would be wary of the truth of what Lim says, as I think it may just be an attempt to discredit the New England bid. At the end of the day, if it was such a great bid why wasnât it successful.