Liverpool Soccer Dispute Moves Toward Resolution in Two Courts

Judges on both sides of the Atlantic Ocean are moving toward a resolution of the legal dispute blocking the sale of Liverpool soccer club to the owners of baseball’s Boston Red Sox.

With a deadline looming today for repayment of a loan owed by the club’s current owners, a judge in Dallas scheduled a hearing this morning to reconsider his 2-day- old order that temporarily halted the sale of one of the world’s most popular sports teams.

Hours after a judge in London ordered current Liverpool owners Tom Hicks and George Gillett to end their Texas lawsuit, state court Judge Jim Jordan in Dallas said he would hear arguments about whether to continue his injunction.

“This smacks of forum-shopping,” Jordan said during yesterday’s hearing.

The soccer club, a five-time European champion, is off to its worst start in more than 50 years. The team is in 18th place in the 20-club league, putting it at risk of relegation -- at the end of each season, the bottom three teams in the Premier League standings swap places with three teams in the second division of English soccer.

American businessmen Hicks and Gillett went to the Dallas judge to block the forced 300 million pound ($475 million) sale of Liverpool to John W. Henry’s New England Sports Ventures LLC, which controls the Red Sox.

Liverpool’s board has approved the sale. Hicks and Gillett say the offer is too low, and have accused the independent board members of ignoring more attractive bids.

Since their 219 million pound leveraged buyout in 2007, Hicks and Gillett have clashed with each other and have angered Liverpool fans because of rising debt and their failure to build a promised new stadium.

Six-Month Extension

Hicks and Gillett were granted a six-month extension to repay by lenders Royal Bank of Scotland Group Plc and Wells Fargo & Co. in April, with the agreement that the club be put up for sale and that independent Chairman Martin Broughton be appointed.

Hicks and Gillett have until today to pay back the 237 million pound loan. The bid from the New England group would repay 200 million pounds of the debt on completion.

Yesterday, RBS won a U.K. court ruling preventing Hicks and Gillett from proceeding with the Texas lawsuit. Justice Christopher Floyd gave the pair until today to end the suit.

The Texas lawsuit by Hicks, 64, and Gillett, 71, seeks $1.6 billion in damages from RBS and independent club board members.

The U.K. High Court decision “is not directed at a foreign court, but directed at the respondent personally to prevent him from pursuing or continuing activities that are abusive,” Floyd said.

Texas Jurisdiction?

In Dallas, an attorney for New England Sports Ventures told Jordan he was surprised by the lawsuit filed in Texas. “We think the Texas court does not have jurisdiction,” George W. Bramblett said.

Stephen Fox, an attorney representing Hicks and Gillett, told Jordan his side was negotiating with RBS about repaying the debt and that the current owners want to resolve the loan separately from the sale of the team.

“It looks as though they are out of the game now as far as any overseas jurisdiction is concerned,” said Danny Davis, an attorney at Mishcon de Reya in London who is not involved in the case. “The judge has effectively blocked any other order from being made.”

One of the other potential purchasers, Singapore billionaire Peter Lim, withdrew his 320 million pound offer today, saying the board won’t speak to him.

Lim Withdraws Offer

“The board and RBS have chosen not to respond or to discuss my offer with me,” Lim said yesterday in an e- mailed statement. “My representatives even offered to meet the board last night.”

Hicks and Gillett point to interest from Lim and others as the reason they needed to go to the U.S. courts. RBS’s attorney countered that the American legal system had no reason to be involved.

“This dispute concerns an English football club and three English companies,” RBS lawyer Richard Snowden said. “It has no connection whatsoever with Texas, other than the fact that Hicks and Gillett may reside there. It’s a plain attempt to frustrate and disrupt proceedings.”

New England Sports Ventures agreed to the deal on Oct. 6.

“We are the owners, with a capital ‘O,’” said David Chivers, an attorney for the Boston group. “The owners, small ‘o,’ from beyond the grave are seeking to exercise with their dead hand a continuing grip on this company.”

The case is: The Royal Bank of Scotland Plc v. Thomas O Hicks, George N Gillett, KOP Football (Cayman) Limited, KOP Football (Holdings) Limited, KOP Football Limited; HC10C03206; High Court of Justice, Chancery Division.

To contact the reporters on this story: Tariq Panja in London at at tpanja@bloomberg.net; Andrew M. Harris in Chicago at aharris16@bloomberg.net

To contact the editors responsible for this story: Christopher Elser at at celser@bloomberg.net; Anthony Aarons at aaarons@bloomberg.net

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