Tom Hicks Files Suit Over Liverpool FC Sale -- and Finds Judge in Dallas to Stop It! For Now.
This morning we told you the U.K. courts had cleared the path for New England Sports Ventures to buy Liverpool FC -- thus ending Tom Hicks's tumultuous tenure as co-owner of the storied team. But this just in from LeMaster Group, Hicks's Dallas PR firm: Judge Jim Jordan of the 160th District Court in Dallas has issued a temporary restraining order that keeps Liverpool's board from going through with the sale. The TRO, which came mere moments before Liverpool's board and NESV were set to seal the deal, details Hicks's efforts to oust the board last week, follows; so too the whole release from LeMaster Group.
The suit, in which Hicks says he ain't getting nearly the coin for Liverpool as he should, was filed by Hicks and the current team ownership against the Liverpool board (including chair Martin Broughton), NESV and the Royal Bank of Scotland. Steve Stodghill at Fish & Richardson -- Mark Cuban's attorney -- is repping Hicks and George Gillett. Hicks not only wants the sale stopped, but he's asking for $1.6 billion, some in damages.
Now, then, from the release, this excerpt:
The suit lays out the defendants' "epic swindle" in which they conspired to devise and execute a scheme to sell LFC to NESV at a price they know to be hundreds of millions of dollars below true market value (and well below Forbes magazine's recent independent $822 million valuation of the club) -- and below multiple expressions of interest and offers to buy either the club in its entirety or make minority investments (including Meriton and Mill Financial). It describes how the defendants excluded the owners from meetings, discussions and communications regarding the potential sale to NESV and interfered with efforts by the owners to obtain financing for Liverpool FC.Now go!
Update at 4:54 p.m.: I just spoke with Stodghill, who says his office is being "innundated with angry e-mails from Liverpool fans." I asked him: How does a Dallas court have jurisdiction over proceedings initiated in the U.K. He says: Royal Bank of Scotland is registered to do business in the state of Texas; and, of course, New England Sports Ventures is U.S. based. Also being sued is Liverpool chairman Martin Broughton. And, says Stodghill, "We allege in the lawsuit he committed some of his tortuous acts in Texas in meetings with Mr. Hicks, so we're suing him in part based on conduct here that did harm to Texas residents."
Hicks and Gillett's £237 million debt to RBS is due Friday. So, then, what happens between now and then, as the TRO hearing is set for October 25? Says Stodghill, what happens in the next two days "remains to be seen." As in: "There could be an additional fight at the courthouse over the TRO -- that could potentially happen. There could be discussions with the board to evaluate the higher offers. The one offer they're refusing to evaluate is £100 million over NESV's. And there could be discussions with RBS."
Update at 5:20 p.m.: This just in -- a statement from Liverpool FC's board concerning the granting of the TRO:
Following the successful conclusion of High Court proceedings today, the Boards of Directors of Kop Football and Kop Holdings met tonight and resolved to complete the sale of Liverpool FC to New England Sports Ventures.Liverpool TRO Hicks Liverpool Petition
Regretably, Thomas Hicks and George Gillett have tonight obtained a Temporary Restraining Order from a Texas District Court against the independent directors, Royal Bank of Scotland PLC and NESV to prevent the transaction being completed.
The independent directors consider the restraining order to be unwarranted and damaging and will move as swiftly as possible to seek to have it removed.
A further statement will be made in due course.
TEXAS COURT GRANTS TEMPORARY RESTRAINING ORDER HALTING SALE OF LIVERPOOL FOOTBALL CLUBDALLAS, October 13, 2010 - The owners of Liverpool Football Club today reported that a Texas State District Court has granted a temporary restraining order (TRO) enjoining the Board of Liverpool Football Club (LFC) from executing a sale of the Club to New England Sports Ventures (NESV). The court set a hearing date of October 25, 2010.
Owners also seeking $1.6 billion in damages calling LFC sale plan an "epic swindle"
The TRO request, signed by Judge Jim Jordan of the 160th District Court in Dallas, was part of a lawsuit filed today by the owners of LFC against Royal Bank of Scotland (RBS), Martin Broughton, Christian Purslow, Ian Ayre, NESV and Philip Nash. The lawsuit also seeks temporary and permanent injunctions, and damages totaling approximately $1.6 billion (over £1 billion).
The suit lays out the defendants' "epic swindle" in which they conspired to devise and execute a scheme to sell LFC to NESV at a price they know to be hundreds of millions of dollars below true market value (and well below Forbes magazine's recent independent $822 million valuation of the club) -- and below multiple expressions of interest and offers to buy either the club in its entirety or make minority investments (including Meriton and Mill Financial). It describes how the defendants excluded the owners from meetings, discussions and communications regarding the potential sale to NESV and interfered with efforts by the owners to obtain financing for Liverpool FC.
The Club's owners are represented by attorneys from the international law firm of Fish & Richardson.
The following are some of the key points in the complaint, which details the roles of RBS and the other defendants, and also describes previously undisclosed offers to purchase LFC:
"The Director Defendants were acting merely as pawns of RBS, wholly abdicating the fiduciary responsibilities that they owed in the sale."
"RBS has been complicit in this scheme with the Director Defendants. For example, in letters from RBS to potential investors obtained just within the past few days, RBS has informed investors that it will approve of a deal only if there is "no economic return to equity" for Messrs. Hicks and Gillett. In furtherance of this grand conspiracy, on information and belief, RBS has improperly used its influence as the club's creditor and as a worldwide banking leader to prevent any transaction that would permit Messrs. Hicks and Gillett to recover any of their initial investment in the club, much less share in the substantial appreciation in the value of Liverpool FC that their investments have created."
"On or about October 4, 2010, Mr. Hicks received a letter of interest from a third potential purchaser represented by FBR Capital Markets ("FBR"), offering to purchase Liverpool FC for £375 to £400 million ($595 to $635 million). The letter informed Mr. Hicks that the potential purchaser would not need financing, possessed the funds to close the transaction, and intended to build a new stadium for Liverpool FC."
"Additionally, the Plaintiffs learned just days ago about another potential investor that made a similar offer in the £350 to £400 million range that was communicated to Defendant Broughton and another unnamed co-conspirator in late August. According to this investor, Mr. Broughton never responded to the offer. Moreover, when the purported sale to NESV was announced, this investor again contacted Mr. Broughton and informed him that the offer, which significantly exceeded the NESV offer, was still on the table. Again, Mr. Broughton brushed this offer aside without further discussion."