SBJ/June 24-30, 2013/Law and Politics

Judge suggests FSG could become defendant in suit

Fenway Sports Group, owner of the Boston Red Sox and Liverpool FC, has long stayed above the legal fray surrounding its contested purchase of the soccer club nearly three years ago.

That may be about to change.

A New York state judge last week not only suggested she would support a subpoena of all Fenway Sports Group documents related to the sale, but she also suggested there was a chance the ownership group could become a defendant in the current lawsuit.

“That would be interesting,” said Judge Eileen Bransten of New York State Supreme Court.

Mill Financial, a lender to former Liverpool owner George Gillett, is suing Royal Bank of Scotland, alleging the bank orchestrated a below-market sale of Liverpool in 2010 that wiped out Mill’s opportunity to be repaid. Mill also alleges that it bid substantially more for Liverpool than Fenway, which was known at the time as New England Sports Ventures, and that RBS’s actions violated a lender agreement signed in early 2010 by all of Liverpool’s creditors.

While efforts by previous Liverpool owners Gillett and Tom Hicks to seek redress for what they said was the underhanded way their club was sold after a default on team debt fell on deaf ears in British court, Mills to date is finding a more receptive audience in Bransten’s courtroom. She has already once rejected a motion to dismiss the case, though RBS refiled and that decision remains pending. And she was blunt last week with Fenway’s lawyer, who contended his client, as an out-of-state third party, should not be drawn into Mill’s lawsuit against RBS.

“They have a right to investigate,” Bransten told David Pegno of Dewey Pegno & Kramarsky. She added that Mill has a right to find out not only whether Fenway knew about the alleged RBS conduct, but also whether it was a part of it.

Bransten promised a quick decision on the motion to subpoena Fenway. She last week agreed to subpoena Hicks and his company Hicks Holdings, which has not objected to Mill’s move.

Hicks and Gillett claim a runaway board of directors sold the team out from under them and for a poor price. One area of documents that Mill wants in particular from Fenway is anything on its own analysis of how much it thought Liverpool was worth.

That sparked Pegno to argue that Mill in essence was seeking to make Fenway an unpaid damages expert, though Bransten waved aside the complaint.

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