Winehole23
10-12-2010, 02:06 AM
Liverpool Club Said to Be in Default; Court Considers Ownership (http://www.bloomberg.com/news/2010-10-11/liverpool-said-to-be-in-technical-default-on-loan-bankruptcy-is-possible.html)
By Tariq Panja - Oct 11, 2010 9:51 PM CT Tue Oct 12 02:51:12 GMT 2010
http://www.bloomberg.com/apps/data?pid=avimage&iid=ipKS4a7fskks
The club emblem is displayed on a wall at Anfield, Liverpool Football Club's stadium. Photographer: Frantzesco Kangaris/Bloomberg
Oct. 6 (Bloomberg) -- Liverpool’s board agreed to sell England’s most successful soccer club to John W. Henry’s Boston Red Sox holding company over the objections of owners Tom Hicks and George Gillett, who vowed to resist an offer they said is too low. Bloomberg's Deirdre Bolton reports. (Source: Bloomberg)
Liverpool’s holding company is in default over 280 million pounds ($446 million) owed to Royal Bank of Scotland Group Plc and Wells Fargo & Co., which may put the soccer club into bankruptcy protection, three people familiar with the situation said.
While U.K. newspapers including the Daily Telegraph have reported that co-owners Tom Hicks (http://search.bloomberg.com/search?q=Tom%20Hicks&site=wnews&client=wnews&proxystylesheet=en10_wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) and George Gillett’s (http://search.bloomberg.com/search?q=George%20Gillett%E2%80%99s&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) debt matures on Oct. 15, the loan is already in default, said the people, who declined to be identified because of pending lawsuits. The U.S. pair is trying to block a sale to New England Sports Ventures LLC because they say the price is too low.
The disputed sale of Britain’s most successful team in European competition comes as Liverpool makes its worst start to the domestic season in more than 50 years and after fans protested Hicks and Gillett’s ownership.
Although the banks prefer not to put the team into administration, a form of bankruptcy, they may if the NESV deal is challenged in court or indefinitely delayed, the people said yesterday.
RBS said yesterday that it got an interim injunction on Oct. 8 to prevent the owners from removing board members as a way to block the sale. The Americans breached their contract by trying to replace Chairman Martin Broughton (http://search.bloomberg.com/search?q=Martin%20Broughton&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) and other independent board members, the bank said in an e-mailed statement yesterday, adding the case will be heard today. The unsettled situation caused a failed bidder, Singapore billionaire Peter Lim (http://search.bloomberg.com/search?q=Peter%20Lim&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja), to consider another offer, two different people said.
Today’s court proceedings “relate to breach of contract only” and “don’t represent steps by RBS to enforce its security or to appoint an administrator,” RBS said in the statement yesterday. “We are unable to provide any visibility on timing for resolution of these proceedings at this stage.”
Points Penalty
Broughton (http://search.bloomberg.com/search?q=Broughton&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja), who approved the sale with two other independent board members, said the owners may lose about 140 million pounds if the deal goes through.
Administration would bring a nine-point penalty from the Premier League. Liverpool is in 18th place in the 20-team top division and would be relegated to the second-tier Championship if the season ended now. That would cost millions, and the team is already struggling with the loss of income from the Champions League, which can bring in as much as 30 million pounds.
NESV, which is controlled by Boston Red Sox owners John W. Henry (http://search.bloomberg.com/search?q=John%20W.%20Henry&site=wnews&client=wnews&proxystylesheet=en10_wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) and Tom Werner (http://search.bloomberg.com/search?q=Tom%20Werner&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja), has made a 300 million-pound bid for the 18-time English champion. Liverpool’s board, which has approved the sale, is seeking court confirmation of the deal’s validity.
Refinancing
Kop Football (Holdings) Ltd. must repay a 237 million-pound loan, and costs associated with an April 30 refinancing that has seen the debt balloon by 40 million pounds.
Nicola Howson (http://search.bloomberg.com/search?q=Nicola%20Howson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja), a U.K.-based spokeswoman for Gillett and Hicks, didn’t respond to a voicemail seeking comment. RBS, NESV and Liverpool declined to comment.
Liverpool’s board last week agreed to sell to NESV over the objections of Hicks and Gillett. The bidder will walk away from the deal if the team enters administration and is docked nine points, one of the people said.
Gillett and Hicks say the sale isn’t legal because they fired two of the board members that approved it. Broughton says the deal is valid because only he has the power to change the structure of the board.
RBS, which required the changes to the board as part of its latest refinancing agreement, is the applicant in a suit listed against Hicks and others at the High Court in London.
“In a situation of Liverpool’s, where we are in default, then your primary obligation is to the creditor not the shareholder,” Broughton said in an interview last week. “That was our primary obligation.”
‘Very Close’
Lim, a former Singapore stockbroker with holdings in palm oil producers and a chain of Manchester United cafes in Asia, wants an opportunity to respond to the board’s decision to accept NESV’s offer and may return with a higher bid. Broughton said the bidding between NESV and Lim was “very close.”
“When you get a competitive situation like that somebody’s always going to go home disappointed,” Broughton said. “He would have been a very good buyer as well.”
The U.S. co-owners’ tenure has been against the backdrop of protests by fans. Thousands of supporters marched before Liverpool’s two most recent home games.
By Tariq Panja - Oct 11, 2010 9:51 PM CT Tue Oct 12 02:51:12 GMT 2010
http://www.bloomberg.com/apps/data?pid=avimage&iid=ipKS4a7fskks
The club emblem is displayed on a wall at Anfield, Liverpool Football Club's stadium. Photographer: Frantzesco Kangaris/Bloomberg
Oct. 6 (Bloomberg) -- Liverpool’s board agreed to sell England’s most successful soccer club to John W. Henry’s Boston Red Sox holding company over the objections of owners Tom Hicks and George Gillett, who vowed to resist an offer they said is too low. Bloomberg's Deirdre Bolton reports. (Source: Bloomberg)
Liverpool’s holding company is in default over 280 million pounds ($446 million) owed to Royal Bank of Scotland Group Plc and Wells Fargo & Co., which may put the soccer club into bankruptcy protection, three people familiar with the situation said.
While U.K. newspapers including the Daily Telegraph have reported that co-owners Tom Hicks (http://search.bloomberg.com/search?q=Tom%20Hicks&site=wnews&client=wnews&proxystylesheet=en10_wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) and George Gillett’s (http://search.bloomberg.com/search?q=George%20Gillett%E2%80%99s&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) debt matures on Oct. 15, the loan is already in default, said the people, who declined to be identified because of pending lawsuits. The U.S. pair is trying to block a sale to New England Sports Ventures LLC because they say the price is too low.
The disputed sale of Britain’s most successful team in European competition comes as Liverpool makes its worst start to the domestic season in more than 50 years and after fans protested Hicks and Gillett’s ownership.
Although the banks prefer not to put the team into administration, a form of bankruptcy, they may if the NESV deal is challenged in court or indefinitely delayed, the people said yesterday.
RBS said yesterday that it got an interim injunction on Oct. 8 to prevent the owners from removing board members as a way to block the sale. The Americans breached their contract by trying to replace Chairman Martin Broughton (http://search.bloomberg.com/search?q=Martin%20Broughton&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) and other independent board members, the bank said in an e-mailed statement yesterday, adding the case will be heard today. The unsettled situation caused a failed bidder, Singapore billionaire Peter Lim (http://search.bloomberg.com/search?q=Peter%20Lim&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja), to consider another offer, two different people said.
Today’s court proceedings “relate to breach of contract only” and “don’t represent steps by RBS to enforce its security or to appoint an administrator,” RBS said in the statement yesterday. “We are unable to provide any visibility on timing for resolution of these proceedings at this stage.”
Points Penalty
Broughton (http://search.bloomberg.com/search?q=Broughton&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja), who approved the sale with two other independent board members, said the owners may lose about 140 million pounds if the deal goes through.
Administration would bring a nine-point penalty from the Premier League. Liverpool is in 18th place in the 20-team top division and would be relegated to the second-tier Championship if the season ended now. That would cost millions, and the team is already struggling with the loss of income from the Champions League, which can bring in as much as 30 million pounds.
NESV, which is controlled by Boston Red Sox owners John W. Henry (http://search.bloomberg.com/search?q=John%20W.%20Henry&site=wnews&client=wnews&proxystylesheet=en10_wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja) and Tom Werner (http://search.bloomberg.com/search?q=Tom%20Werner&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja), has made a 300 million-pound bid for the 18-time English champion. Liverpool’s board, which has approved the sale, is seeking court confirmation of the deal’s validity.
Refinancing
Kop Football (Holdings) Ltd. must repay a 237 million-pound loan, and costs associated with an April 30 refinancing that has seen the debt balloon by 40 million pounds.
Nicola Howson (http://search.bloomberg.com/search?q=Nicola%20Howson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja), a U.K.-based spokeswoman for Gillett and Hicks, didn’t respond to a voicemail seeking comment. RBS, NESV and Liverpool declined to comment.
Liverpool’s board last week agreed to sell to NESV over the objections of Hicks and Gillett. The bidder will walk away from the deal if the team enters administration and is docked nine points, one of the people said.
Gillett and Hicks say the sale isn’t legal because they fired two of the board members that approved it. Broughton says the deal is valid because only he has the power to change the structure of the board.
RBS, which required the changes to the board as part of its latest refinancing agreement, is the applicant in a suit listed against Hicks and others at the High Court in London.
“In a situation of Liverpool’s, where we are in default, then your primary obligation is to the creditor not the shareholder,” Broughton said in an interview last week. “That was our primary obligation.”
‘Very Close’
Lim, a former Singapore stockbroker with holdings in palm oil producers and a chain of Manchester United cafes in Asia, wants an opportunity to respond to the board’s decision to accept NESV’s offer and may return with a higher bid. Broughton said the bidding between NESV and Lim was “very close.”
“When you get a competitive situation like that somebody’s always going to go home disappointed,” Broughton said. “He would have been a very good buyer as well.”
The U.S. co-owners’ tenure has been against the backdrop of protests by fans. Thousands of supporters marched before Liverpool’s two most recent home games.