The High Court battle between Royal Bank of Scotland (RBS) and Liverpool Football Club’s US owners Tom Hicks and George Gillett got underway this morning with the aim of resolving a power struggle on the club’s board.
Erskine Chambers’ Richard Snowden QC was instructed by Freshfields Bruckhaus Deringer partner Patrick Swain to act for the bank in the application hearing before Mr Justice Floyd this morning.
Snowden faced Maitland Chambers’ Paul Girolami QC, who was been instructed by Peters & Peters partner Jonathan Tickner and partner Keith Oliver for Hicks and Gillett.
The club owes more than £200m to RBS, which has instructed Snowden to argue that the court should grant it mandatory injunctive relief to reconstitute the club’s board.
Snowden told Floyd J that Hicks and Gillett carried out a deliberate breach of contract when they moved to sack the club’s managing director Christian Purslow and commercial director Ian Ayre from the board last week. Such a move was contrary to an agreement the pair made with the bank when they extended a £237m line of credit in April, Snowden said.
Responding, Girolami rejected suggestions that his clients had disbanded the board as a means of stalling the sale of the club to US bidders New England Sport Ventures (NESV). Instead, he argued, the club had received two alternative bids, which the owners felt needed to be considered.
The first came from Singapore-based Meriton, which is owned by Singapore tycoon Peter Lim. The company is being advised on its £320m bid by Macfarlanes on the domestic front and by Singapore firm WongPartnership (12 October 2010).
The second bid has come from US hedgefund Mill Financial, which is being advised by Mayer Brown, with UK corporate head Peter Dickinson and partner Kate Ball-Dodd leading. That bid included a commitment to pay off the company’s creditors as well as spending at least £100m on a new stadium.
The club has until the end of the week to settle its outstanding debts with RBS otherwise the bank could force it into administration, costing the club nine Premier League points.