Liverpool Football Club - Sale to NESV15 Oct 2010
Slaughter and May advised the Board of Liverpool Football Club (LFC) and its parent companies, Kop Football Limited and Kop Football (Holdings) Limited, (the parent companies) on the sale of LFC to New England Sports Ventures (NESV), an American sports investment company controlled by John W. Henry. NESV currently owns a portfolio of companies including the US baseball team the Boston Red Sox, New England Sports Network, Fenway Sports Group and Roush Fenway Racing.
On 06 October 2010, the Board of LFC announced that it had agreed the sale to NESV conditional upon certain matters, in particular, Premier League approval and resolution of a dispute concerning Board membership.
A game of transatlantic injunction tennis followed with a flurry of urgent and high-profile court applications in the English and Dallas courts. Tom Hicks and George Gillett, owners and directors of LFC and the parent companies, had prior to the Board meeting on 06 October attempted to reconstitute the Boards of the parent companies to remove the independent directors, thereby enabling Hicks and Gillett to block the sale. However, this attempted reconstitution of the Boards of the parent companies put Hicks and Gillett in breach of certain obligations owed to RBS under financing and corporate governance arrangements. This resulted in RBS successfully applying to the English court for a mandatory injunction reversing the purported reconstitution. Simultaneously, the Boards of the parent companies and Hicks and Gillett were issuing their own applications. The Boards of the parent companies applied for a declaration that the sale to NESV had been validly entered into (although this application was superseded by events and so never heard), while Hicks and Gillett applied - unsuccessfully - for a declaration that the sale agreement was not binding and an injunction preventing completion of the sale.
Having failed in the English court, Hicks and Gillett promptly applied for relief to the Dallas court, which granted a temporary restraining order blocking the sale. In response, RBS and the Boards of the parent companies successfully applied to the English court for an anti-suit injunction. Hicks and Gillett were given a 24 hour deadline to discontinue the Dallas proceedings, which they did, thereby enabling the sale to proceed.
Completion of the sale of LFC to NESV was announced on the 15 October 2010. The transaction valued LFC at £300 million and eliminated the acquisition debt placed on LFC by its previous owners.
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