Upcoming Conferences and Events
SBJ/November 14-20, 2011/Finance
Lawsuit questions Liverpool sale price
Published November 14, 2011, Page 7
Those charges are now winding their way though a case in New York Supreme Court, but there’s a twist: The case is brought by one of Gillett’s lenders, Mill Financial, which is owned by Washington Redskins minority investor Dwight Schar. In the lawsuit, Mill said it would have paid as much as 64 percent more for the club than the offer agreed to by the Liverpool board.
While Mill is not seeking to upend the acquisition — it seeks $120 million for the loan and interest — the case does provide a closer look at one of the more contentious team sales in recent memory. It also could draft many of
|Tom Hicks (top, left) and George Gillett protested the sale last year of Liverpool FC to John Henry (above, center) of NESV.
No court dates have been set.
“Mill Financial’s disappointment in being outbid for the purchase of the Club … has resulted in Mill Financial turning its sights to RBS, the secured lender to the Club,” RBS said in recent reply brief.
Mill, however, contends that it was ignored when it notified the board and RBS of its intention to bid for the club during the summer of 2010 and that RBS’s only goal was to get its money out.
RBS, Wells Fargo and Mill had signed a tri-party lender agreement in April 2008 promising one another of keeping the others informed of all developments as it became clear that the Liverpool owners, Hicks and Gillett, would have a tough time making debt payments. Mill contends it was kept in the dark during the summer of 2010 and that its superior offer for one of sport’s hallowed properties was ignored.
These are the same allegations Gillett and Hicks made at the time of the sale, but they were largely dismissed because of their indebtedness and difficulties in management of the club.
Mill called the 235 million-pound purchase seriously below market value and contends in the lawsuit that it would have paid as much as 385 million pounds and had notified the board as such.
Hicks and Gillett attempted to block the sale in a United States court, but a U.K. court at the time overruled that effort and brought it back to London. As a result, the Mill Financial effort is the only U.S. lawsuit related to the transaction, which ignominiously ended the three-year tenure of Hicks and Gillett at significant loss.