Legal Brief: Liverpool FC's future hanging in balance

Those waiting outside Court 14, where pop star Peter Andre was pursuing a libel claim against his ex-wife Katie Price, was rather subdued in comparison with those waiting just down the hall outside Court 16, where the future of Liverpool FC was being decided.

With the RCJ 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 the football club’s lender 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 owners New England Sport Ventures (NESV).

The RBS barrister 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 his son Mack Hicks and assistant Lori Kay.

Snowden called for the court to grant mandatory injunctive relief to reconstitute the original board and allow the sale to go through.

Responding, Paul Girolami QC, having been instructed by Peters and 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.

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 board. The dispute was supposedly between RBS and Hicks, but that didn’t stop Floyd J from asking Grabiner on his opinion on the matter. The silk suggested 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.

As Legal Brief was being sent out the drama was still unfolding. Yesterday (14 October) the High Court granted Liverpool’s board an anti-suit injunction against the football club’s owners (read more). But with the Texas court that granted current Hicks and Gillett a temporary restraining order, preventing the sale, adjourning proceedings until 1pm today Liverpool’s future is still hanging in the balance.

katy.dowell@thelawyer.com