The prospect of Liverpool Football Club losing its high court case against current owners Tom Hicks and George Gillett this week could plunge the club into a monumental struggle on and off the pitch.
Should Hicks and Gillett win the case, not allowing a £300million sale of the club to New England Sports Ventures to go through, Liverpool’s holding company Kop Holdings is likely to be put into administration shortly after Friday’s deadline to repay £280million of loans to the Royal Bank of Scotland.
The RBS would see administration as the only way to force a change in power at the club, with victory for Hicks and Gillett in court meaning they would have the power to change the Board of Directors.
Although the club itself would not technically be in administration, the Premier League would likely impose a nine point deduction penalty. This would leave Roy Hodgson’s men bottom of the table, on -3 points, with an uphill battle to face.
And it gets worse…
Owen Gibson Guardian
“Sources close to the negotiations indicated that the position of John W Henry and the rest of the NESV board has hardened further since yesterday, when the Guardian revealed that they may walk away. The news will dismay Liverpool fans, who hoped the ownership of Tom Hicks and George Gillett was nearing an end. RBS is seriously considering administration if a £237m loan to the club is not refinanced by Friday, after its legal advisers warned it could leave itself open to a challenge if it does not do so.”
Paul Kelso Telegraph
“NESV’s change in position comes after the Premier League told the club board that a nine-point deduction was a “significant risk” even if the administration occurred at Liverpool’s holding company Kop Football (Holdings) Ltd.
“Royal Bank of Scotland, whose £237 million loans to Hicks and Gillett via Kop Holdings becomes due on Friday, has indicated that if the court rules against Broughton it might be forced put the company into administration to effect a change of control. NESV’s threat to walk away came as a surprise to RBS and the club board, and was interpreted by several sources close to the negotiations as a positioning exercise. It is also evidence of a marked deterioration in relations between John W Henry’s group, the club board and RBS.”
However, there is a plan B…
Nick Harris The Independent
“But in all likelihood, the club won’t get anywhere close to administration. One reason is that Broughton has what are being described as “fallback” options (“a Plan B and Plan C”, says a source), which he believes can force through a sale to NESV without administration. The details of these are not known but would involve convoluted legal mechanisms, with Royal Bank of Scotland probably extending its nominal 15 October deadline while they were being played out. These would only come into play if Broughton loses.
“In any case, given that RBS would ultimately trigger administration, and that there is no logical benefit to RBS of Liverpool going into administration, it is hard to see that Liverpool will end up there.
“Why? Because, with Liverpool in administration, RBS would no longer be guaranteed to get all its money back; it would lose control of the situation. Theoretically, it could end up with 20p in the pound or similar.”
This is one of the biggest weeks in the club’s history, and certainly, the biggest week in it’s future.