With John W Henry‘s New England Sports Ventures (NESV) consortium waiting in the wings to purchase the club outright, boardroom legal action still pending and current owners Tom Hicks and George Gillett clinging on to their respective stakes for dear life, Liverpool’s gaggle of interim directors are now facing the devil’s bargain.
Chairman Martin Broughton, installed by Hicks and Gillett back in April to facilitate the sale of the club at a ‘reasonable’ price, is now seeking a High Court ruling that will allow him to rubber-stamp NESV’s £300 million takeover bid without the approval of the American pair – who believe that the offer seriously undervalues their investment which, given the amount of money they have pumped into the club during their four-year tenure, is a fairly accurate assessment.
Should Broughton fail to force through a sale on legal grounds, Kop Football Ltd (the holding company with which Liverpool Football Club is ineffably tied) will be placed into administration due to Hicks and Gillett’s inability to repay the £237.4 million’s worth of loans that they owe to their current lenders, The Royal Bank of Scotland (RBS) – thus incurring a nine-point penalty according to Premier League statutes.
Broughton himself is all-too-aware of the ‘catastrophic’ effects that such sanctions can have on clubs that are embroiled in financial turmoil;
“[Administration] could happen, yes. This is all part of why it is important that we made the decision on Tuesday to accept one or the other of the two very acceptable bids. Heading for administration was a very likely outcome if we didn’t.
Even now with the court case looming, administration cannot be ruled out. It is not inevitable, and I am not going to start giving percentages of how much it is possible. That is why we are going to court to clarify our position on the sale of the club, and we have to win in court, and we will win in court.
Going into administration needs to be avoided at all costs, as the negative impact would be catastrophic. Setting aside the nine-point deduction, it would have an impact on Liverpool’s value and be wide open to predators, whereas we have what we believe is the right new owners to take the club forward.”
Whereas it would appear that NESV will remain committed to buying the club whatever the outcome of the High Court hearing, it seems that there is now a very real possibility that they will begin their incumbency with Liverpool rock bottom of the Premier League on minus-three points – which is hardly what it said in the brochure.
Should the judiciary rule in favour of Hicks and Gillett, RBS will continue in it’s push to forcibly usurp the American pair by calling in their unpayable loans on October 15th as planned which, in turn, would nudge Liverpool’s holding company into administration.
The Premier League’s guidance to clubs in Liverpool’s position states that;
“An insolvency event at holding company level will incur a points deduction unless the club itself is solvent, and can demonstrate that the insolvency is not caused by matters relating to the management of the football club.”
Liverpool’s financial figures show that the club itself is solvent and is actually in fairly rude health considering the tidal wave of boardroom bullsh*t it has faced over the past few months.
However, the fact that Hicks and Gillett were only able to purchase Liverpool with the loans from RBS means that there is almost no hope of persuading the Premier League that the administration has not been caused by ‘footballing matters’ – meaning that the nine-point deduction will be duly forthcoming, regardless of the devastating effect it may have on the football club.
I really don’t see what Hicks and Gillett think they are set to gain from blocking Broughton’s attempts to sell-up to NSEV. Do they really believe that there are bigger, more satisfying offers out there? Surely no prospective takers are going to be willing to gazump Henry and co, especially after this week’s quabblings.
Hicks and Gillett need to realise that there is no more money to be squeezed from a club that (under it’s current ownership) is a dying entity and, by bringing about a points penalty through sheer myopic greed, they are not only shooting themselves in the wallet, but the next set of owners as well.
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