Bank Moves to Keep Board; Reds' Main Creditor's Injunction to Stop Sackings

The Journal (Newcastle, England), October 12, 2010 | Go to article overview

Bank Moves to Keep Board; Reds' Main Creditor's Injunction to Stop Sackings


THE Royal Bank of Scotland has obtained an injunction preventing Liverpool owners Tom Hicks and George Gillett from sacking independent chairman Martin Broughton or any other board members ahead of today's court case.

RBS is the club's main creditor, having lent Americans Hicks and Gillett the money to buy the club in March 2007, and is claiming in the High Court that the pair breached their agreement by trying to replace managing director Christian Purslow and commercial director Ian Ayres on the board last week.

The outcome of the case should decide Liverpool's immediate future, with the club's board having agreed to a pounds 300million offer from New England Sports Venture, against the wishes of Hicks and Gillett.

RBS said in a statement: "RBS in its capacity as lender to the Kop group of companies received the benefit of various contractual undertakings from Mr Hicks and Mr Gillett in relation to the corporate governance arrangements that Mr Hicks and Mr Gillett agreed would apply to the Kop group of companies with effect from April 2010.

"Those undertakings provided for the appointment of Mr Broughton as chairman of the board and the appointment of the chief executive and commercial director of LFC to the Kop boards.

"As is well known Mr Hicks and Mr Gillett purported to make changes to those corporate governance arrangements on 4 October. This was in breach of those contractual undertakings.

"In light of that purported breach of contract RBS sought and obtained on Friday 8 October 2010 an interim injunction against Mr Hicks and Mr Gillett until a further hearing scheduled for tomorrow. "Among other things, that interim injunction prevents Mr Hicks or Mr Gillett taking any steps to remove or replace Mr Broughton from his position as chairman of the board of the Kop companies or from taking any other steps to appoint or remove any directors from the board of the Kop companies."

It also emerged yesterday that Liverpool's owners have been technically in default of their refinancing agreement for some time - despite the repayment deadline of Friday.

RBS have chosen, however, not to enforce that default position which would have led to Kop Holdings going into administration and risk Liverpool incurring a nine-point deduction from the Premier League. …

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