Re: LFC Sold to NESV (RBS WIN COURT RULING - CONFIRMED)
On the application from RBS to reconstitute the board after Hicks and Gillett had changed it last week in an effort to block the sale to New England Sports Ventures, the judge ruled there was no arguable case.
And on a separate application from Hicks and Gillett that they only breached the agreement with RBS because the bank, Broughton and the so-called English directors had already breached it by shutting them out of sales negotiations, the judge was equally dismissive.
In summary, this means Hicks and Gillett breached the terms of the £237m loan with RBS by changing the composition of the board and the bank is therefore entitled to order the board to be reconstituted. Or put more simply, Purslow and Ayre are back on the board.
Mr Justice Floyd went on to say that it was now up to Broughton, the directors of the club and their holding companies to decide whether the sale to NESV went ahead, although he gave Hicks and Gillett until 2000 BST on Wednesday to participate in any board meeting to decide the next step in the sale.
So what happens next?
Broughton and his lawyers will now try to persuade Hicks and Gillett to particpate in a telephone conference to determine whether the original £300m deal with NESV still holds.
NESV claim they have a binding agreement that runs until 1 November but advisers for a rival bid from Singapore businessman Peter Lim, which was increased to £320m, plus 40m for players, on Tuesday, will argue their offer should be reconsidered by the board.
Hicks and Gillett were told by Mr Justice Floyd that he did not feel it appropriate to grant them an appeal but it remains likely they will go to the Court of Appeal on Wednesday.
There is also the issue of a possible trial next Thursday. The judge made it clear that his rulings were not the declaratory judgment Broughton is seeking on the validity of the deal with NESV.
Clearly there will be no need for a trial if Hicks and Gillett, who claim they now accept the club must be sold, agree a deal at Wednesday's board meeting. And Lord Grabiner, QC for Liverpool's holding companies, told me he did not expect there to be one.
Perhaps the most telling part of Mr Justice Floyd's judgment came when he spoke of the substantial damage he would have caused to the football club had he ruled in favour of Hicks and Gillett. Amazingly, this was only the second time during almost six hours of High Court proceedings that the club at the centre of this dispute was mentioned.
"If I granted an injunction the damage to the club... would be substantial," said Mr Justice Floyd. "The damage would be enormously difficult to quantify. How does one quantify the effect on the fortunes of the club or the underlying value of the asset."
These remarks help to explain why a large crowd of Liverpool fans gathered outside the High Court to greet a jubilant Broughton and Purslow as they emerged. They shook the two men by the hand and chanted anti-Hicks and Gillett songs as Broughton declared that justice had been done.
Broughton and members of his team then attempted to escape the scrum by running off down the Strand to start the next phase of this extraordinary story - to complete a deal together with NESV that could put the club back on track.
http://www.bbc.co.uk/blogs/davidbond/2010/10/how_did_it_get_this_bad_for_li.html
