Mr Justice Floyd grants injunction to stop Hicks and Gillett breaking up the Liverpool FC board and rules that the American duo had no right to try to halt the sale of the club.
The press pack at the Royal Courts of Justice (RCJ) was salivating at the doors last week, with not one but two high-profile showdowns on the lists.
Those waiting outside Court 14, where pop star Peter Andre was pursuing a libel claim against his ex-wife Katie Price, was almost subdued in comparison with the throng waiting down the hall, outside Court 16 where the future of Liverpool FC was being decided.
Interest in the internecine battle between the two celebrities had clearly waned as the football club’s fate was being fought over just a few doors away.
And there was plenty of action inside the RCJ too, with the court due to hear seven applications in one morning. At one point there were more than 65 solicitors and barristers in one room, waiting to hear when their case would be heard.
The Liverpool FC case, Royal Bank of Scotland (RBS) v Hicks and Others, was third in line.
Erskine Chambers’ Richard Snowden QC, instructed by Freshfields Bruckhaus Deringer partner Patrick Swain for RBS, was first up. Snowden told the presiding judge, Mr Justice Floyd, that the club’s owners, Tom Hicks and George Gillett, had deliberately and knowingly breached the terms of a £237m loan extension provided by the bank by attempting to block a £300m takeover of the club by Boston Red Sox owner New England Sport Ventures (NESV).
Snowden accused the pair of showing “breathtaking arrogance” in trying to break up the club’s board by sacking managing director Christian Purslow and commercial director Ian Ayre, and replacing them with Hicks’ son Mack and assistant Lori Kay.
The RBS barrister called for the court to grant mandatory injunctive relief to reconstitute the original board and allow the sale to go through.
Responding, Paul Giro-lami QC, having been instructed by Peters & Peters partners Jonathan Tickner and Keith Oliver to act for Hicks and Gillett, rejected suggestions that the owners had tried to scupper a sale to get a higher return.
They were not, he said, “trying to throw a spanner in the works” of the proposed sale. “What has happened is that the English directors have gone forward with the NESV bid without properly considering alternatives when those alternatives at least appear to give better prospects,” he added.
The application was supported in court by One Essex Court heavyweight Lord Grabiner QC, who had been instructed by Slaughter and May partner Efstathios Michael to represent the current board.
The dispute was supposedly between RBS and Hicks, but that did not stop Floyd J from asking Grabiner for his opinion on the matter.
The silk said that even though there were other offers on the table, Hicks and Gillett were still bound by their contract with RBS.
Upholding the argument and granting the injunction, Floyd J ruled that the owners had no right to veto the sale.
Posted 13 October
*As The Lawyer was going to press the story was still unfolding. On Wednesday Hicks and Gillett gained an injunction in a Texas court stopping the sale to NESV. On Thursday the High Court granted the board an anti-suit injunction against the US pair’s bid to stop the sale. The matter remained on a knife-edge at press time.