Liverpool move closer to a sale with court win

LONDON Wed Oct 13, 2010 9:33am EDT

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LONDON (Reuters) - The board of Premier League side Liverpool will meet later on Wednesday to discuss a sale after a High Court judge told a crammed court full of fans, media and lawyers that the American owners could no longer block a deal.

The board has at least two offers to consider following the ruling which makes the alternative prospect of going into administration less likely.

The ruling, which paves the way for a sale of the highly indebted club, was greeted with relief by delighted fans who jostled with photographers outside court to thank the board and their barristers on the steps of the famous building.

Earlier fans wearing the club's red shirts and scarves had pushed with journalists to get into the tiny oak-paneled court room to hear Justice Floyd deliver his almost hour-long verdict.

The narrow stone corridors around Court 18 were also teeming with spectators straining to hear and make sense of the judgment.

"We're delighted with the result," chairman Martin Broughton said after emerging from court, shouting over the noise of singing fans. "Justice has been done. This will clear the way for the sale."

The ownership battle engulfing one of the world's most famous sporting institutions ended up in court after owners Tom Hicks and George Gillett tried to sack members of the board last week in a last ditch bid to keep control of the club.

The board were in the process of agreeing a 300 million pound ($477.2 million) sale to New England Sports Ventures (NESV), the owner of the Boston Red Sox, ahead of an October 15 deadline to repay over 200 million pounds worth of debt.

It has since also received an increased 320 million pound offer from Singapore billionaire Peter Lim.

BRIGHTER FUTURE

The ruling means the future now looks much brighter for Liverpool, England's most successful soccer domestic team, as they look to negotiate a deal ahead of Friday's deadline.

Lim said he welcomed the court decision and urged the board to consider all sale options, while NESV pointed out that they had a binding agreement to buy the club.

"We are ready to move quickly and help create the stability and certainty which the club needs at this time," NESV said. "It is time to return the focus to the club itself and performances on the pitch."

Broughton said outside court that they would now take legal advice when asked if the club had a duty to consider other bids that may be higher.

If the repayment date with major creditor the Royal Bank of Scotland (RBS.L) (RBS) had been missed, the five-time European champions could have been put into administration and docked 9 points.

"This morning's announcement means that the possibility of administration is now highly unlikely and the smart money is on the deal with NESV now going through," Gerald Krasner, a partner at insolvency and recovery specialist Begbies Traynor said.

The judge did not grant the pair the right to appeal although they can still go to the Court of Appeal.

Lawyers for Hicks and Gillett admitted on Tuesday that they had breached their contract with RBS by trying to sack board members but said they had been forced into such drastic action because the board had excluded them and would not consider alternative offers.

The judge said he rejected this argument and said the owners did not have an absolute right to veto a sale. He said the pair had been guilty of the "clearest possible breach" of corporate governance rules.

He also rejected their bid to halt the sale negotiations because he said the club's current situation was "highly unsatisfactory" and needed to be resolved urgently.

"I am not prepared to grant any relief," he said. "If I did it would risk stopping the sale."

Hicks and Gillett will now be invited to attend a board meeting later on Wednesday to discuss a sale. Lawyers for the two men had told the court they accepted a sale was likely but said they had been looking for more time to get a better offer.

John Henry of the NESV consortium, celebrated the result and said through his Twitter account: "Well done (board members) Martin, Christian & Ian. Well done RBS. Well done supporters!"

(Editing by Jon Bramley)

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