Source: Telegraph
Liverpool takeover: court case between RBS and Tom Hicks to begin on Tuesday
RBS revealed this afternoon that it was granted an interim injunction against the American co-owners on Friday, preventing them from making any changes to the board of the football club or its holding companies.[LNB]The bank's move comes after Hicks and Gillett tried to block the sale of the club to New England Sports Ventures by removing managing director Christian Purslow and commercial director Ian Ayre from the board.[LNB] Related ArticlesReina concerned relegation battle on the cardsPurslow convinced buy-out still on trackNo red carpet for new ownersBroughton: points loss fear 'catastrophic'Liverpool debt at heart of court battleSport on televisionPurslow, Ayre and chairman Martin Broughton had agreed to accept a £300m offer from NESV against the wishes of Hicks and Gillett, who believe the price undervalues the club.[LNB]The RBS action, which will be heard at 10.30am by Mr Justice Floyd at the Royal Courts of Justice on The Strand, is separate from a 'declaratory judgment' being sought by Broughton to approve the sale.[LNB]Broughton said last week that the co-owners are in breach of under-takings that allowed him to appoint the board, and required them not to block any 'reasonable' sale.[LNB]As these undertakings were made to RBS rather than the club however the bank will test them legally first before Broughton begins his action. In a statement RBS made it clear that its legal action is not an attempt to call in £237m of loans that become due on Friday, or to appoint an administrator.[LNB]The statement said: 'RBS in its capacity as lender to the Kop group of companies received the benefit of various contractual undertakings from Mr Hicks and Mr Gillett in relation to the corporate governance arrangements that Mr Hicks and Mr Gillett agreed would apply to the Kop group of companies with effect from April 2010.[LNB]'Those undertakings provided for the appointment of Mr Broughton as chairman of the board and the appointment of the chief executive and commercial director of LFC to the Kop boards.[LNB]'As is well known, Mr Hicks and Mr Gillett purported to make changes to those corporate governance arrangements on 4 October. This was in breach of those contractual undertakings.[LNB]'In light of that purported breach of contract RBS sought and obtained on Friday 8 October 2010 an interim injunction against Mr Hicks and Mr Gillett until a further hearing scheduled for tomorrow.[LNB]'Among other things, that interim injunction prevents Mr Hicks or Mr Gillett taking any steps to remove or replace Mr Broughton from his position as chairman of the board of the Kop companies or from taking any other steps to appoint or remove any directors from the board of the Kop companies.[LNB]'The proceedings tomorrow represent the continuation of Friday's proceedings and relates to breach of contract only. These proceedings do not represent steps by RBS to enforce its security or to appoint an administrator. [LNB]'We are unable to provide any visibility on timing for resolution of these proceedings at this stage.'[LNB]The RBS action is the start of what could be a protracted legal process which may test the patience of NESV. The suggestion that administration with a nine-point deduction may be the only mechanism for the club to change control has caused concern in John W Henry's group.[LNB]They have suggested they will walk away from the deal if the club is docked nine points, and have secured a clause in the deal signed with Broughton in the early hours of Wednesday allowing it to renegotiate the price in the event of administration.[LNB]NESV's change in position comes after the Premier League told the club board that a nine-point deduction was a 'significant risk' even if the administration occurred at Liverpool's holding company Kop Football (Holdings) Ltd. [LNB]
