The courtroom drama that will decide the sale of Liverpool FC is a “quite unique” situation, a leading city solicitor said last night, writes City Editor David Bartlett.
Chairman Martin Broughton will go to court in the coming days to seek a “declaratory judgment” that he and fellow board members Christian Purslow and Ian Ayre have the legal powers to sell the club.
Tom Hicks and George Gillett believe the three UK board members should not be able to sell against their wishes.and were last night “reviewing” their position.
James Dow, of Dow Schofield Watts, said ordinarily board members would not have the ability to sell a company’s asset without shareholders’ approval.
He said in usual business scenarios, where a bank was owed hundreds of millions of pounds and the owners refused to sell, the company would be forced into administration
Seeking a declaratory judgement is an unusual legal move covered by the UK’s civil procedure rules.
Effectively Broughton is asking a judge to decide whether he has the legal power to sell the club in the face of opposition from Hicks and Gillett.
Under the rules the judge can rule in favour of the American co-owners, Broughton, or an unlikely outcome – refuse to reach a verdict.
An appeal process is likely to be fairly swift, possibly within 72 hours.
Broughton believes he is on solid ground and is being advised by London-based Slaughter and May. He said Hicks and Gillett, in attempting to oust Purslow and Ayre from the board, and standing in the way of a sale had abused written undertakings given to Royal Bank of Scotland when the club’s debt was refinanced in the spring.
Mr Dow said: “This is definitely a quite unique set of circumstances. Normally the bank would force the administration of the company.”
Source: Liverpool Daily Post.co.uk