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Soccer-Liverpool had better prepare for long legal battle
October 15, 2010 / 8:15 PM / 7 years ago

Soccer-Liverpool had better prepare for long legal battle

* Gillett, Hicks to seek at least $1.6 bln in damages

* Henry and partners not discussing the potential lawsuit

* Analysts say legal battle could last years

By Ben Klayman

DETROIT, Oct 15 (Reuters) - Liverpool fans may be excited about the completion of the seemingly never-ending sale of their soccer team but they had better steel themselves for a legal battle that could distract the new owners for years.

New England Sports Ventures (NESV), which owns the Boston Red Sox baseball team, on Friday completed its purchase of Liverpool for 300 million pounds ($480.8 million) after the previous owners George Gillett and Tom Hicks lifted a restraining order in a Texas court. [ID:nLDE69E0WF]

However, the ousted co-owners promised they would instead focus their legal efforts on seeking at least $1.6 billion in damages for what they called an “epic swindle”.

That bid will start with a return to the High Court in London, Texas attorney Tom Melsheimer, who represents the two Americans, told Reuters on Friday.

The initial approach will be to persuade the High Court to withdraw the ruling that forced Hicks and Gillett to halt their proceedings in Dallas.

Beyond that, though, the legal team representing the ousted duo say they will look at all options as they bid to recover what they claim are at least $1.6 billion in damages.

“All legal recourse will be pursued,” Texas attorney Steve Stodghill, who also represents the pair, said in a statement that cited “self-serving and illegal behavior from (Liverpool) directors and outsiders.”


With little to lose now the deal is complete, Gillett and Hicks may settle in for a long slog in the courts as they argue they were unfairly cut out of a sales process that did not recognise a higher bid, analysts said.

“Frankly, I think it’s the beginning of a long book, rather than a final chapter,” said Rick Horrow, a sports lecturer at Harvard Law School.

On the day his NESV group closed the deal, John Henry talked of being “incredibly proud and humbled” but he and his partners did not address the potential lawsuit they, the club’s board and major creditor Royal Bank of Scotland could face.

An NESV spokeswoman also declined to comment on the lawsuit.

RBS said in a statement any further claims would be “vigorously opposed.”

Gillett and Hicks’ attorneys called the London court’s ruling clearing the way for the sale of the English Premier League club “overbroad and unfair”.

“We believe that once the English court finally has a chance to hear all the facts, a very different picture will be painted,” the attorneys said.

Of course, Henry and others involved could make this go away with money, analysts said.

“A settlement is likely because even the possibility of a lawsuit dragging out probably affects the ability of RBS and (NESV) from really moving forward,” said Robert Boland, professor of sports management at New York University.


The threatened damages amount is more for shock value, Boland said.

“You never sue for a little,” he said. “Every (car) bumper tap in New York City is worth $2 million in damages. You always put the biggest number you possibly could imagine for damages on the lawsuit to start.”

However, Marc Ganis, president of consulting firm Sportscorp Ltd, said Gillett and Hicks are unlikely to settle quickly because allowing their claim to play out in the courts could favoUr them or at least lead to a larger settlement.

If the lawsuit is filed in Texas, watch out.

“I would be uncomfortable being in a Texas courtroom as a defendant in that matter if I had a deep pocket because there are enough activities that were done in the heat of the moment that may not play well when viewed in hindsight by a jury and picked apart by smart trial lawyers,” Ganis said.

A settlement is also likely to be years away, he said.

“A settlement will come after one side or the other feels a tremendous amount of pain and a lot of risk,” Ganis said. “It would be the exception rather than the rule if the legal battle ended any time soon.”

Legal fees annually for NESV could potentially run into millions but Henry and his partners could easily handle that with their cash flow as long as a ruling did not go against them, Ganis said.

The question is whether decisions made in the heat of battle will look acceptable to a jury in hindsight.

“What we have seen in courtrooms is often you get comments that are made in the heat of the moment, e-mails to the media, that then get picked apart years later in a courtroom that people are then very sorry they made,” he said.

Reporting by Ben Klayman in Detroit; additional reporting by Simon Evans in Miami; Editing by Ken Ferris; To query or comment on this story email

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