Bitter Liverpool legal battle returns to Texas court

The fierce battle surrounding the ownership of English Premier League club Liverpool returns to the unlikely setting of a Dallas county court on Friday.

By (Reuters)

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Published: Fri 15 Oct 2010, 1:03 PM

Last updated: Mon 6 Apr 2015, 4:35 AM

The finances of one of England’s finest soccer clubs have became a very American matter with the current and prospective owners hailing from North American sports backgrounds.

Liverpool, five-times European champions, are co-owned by Americans Tom Hicks and George Gillett but the club’s board want to sell the team to New England Sports Ventures (NESV), the owners of Major League Baseball’s Boston Red Sox.

Hicks and Gillett believe the sale, agreed by independent directors on the club board, for 300 million pounds ($479.8 million) to NESV, undervalues the club — one of England’s most famous sports teams and a global brand.

Billionaire Hicks previously owned a Major League Baseball team, the Texas Rangers, and still owns the Dallas Stars NHL franchise, while Gillett owns NHL’s Montreal Canadiens.

The 160th District Court in Dallas on Wednesday imposed a temporary restraining order on Liverpool’s chairman, Martin Broughton, the Royal Bank of Scotland, which is the club’s major creditor, and NESV which is owned by John Henry.

On Thursday, a high court judge in London responded by granting an injunction to restrain the Dallas court ruling, saying the case had no connection to Texas.

The judge gave Hicks and Gillett until 1500 GMT on Friday to comply with his orders and, with the case in Dallas due to start at 1200 GMT, that leaves little time for the matter to be resolved before the deadline.


In Dallas, the two parties were in front of Judge Jim Jordan to argue over whether the restraining order should stay in place and to deal with a contempt of court motion from the Hicks team.

That motion called for the jailing and fining of Liverpool chairman Broughton and the other defendants for ignoring the order and heading back to the High Court.

On Friday, the judge will have to decide whether or not to maintain or dissolve the restraining order on the sale.

It may seem odd that a court in Dallas has any role in the affairs of a soccer club from North-West England and for a district court in Texas to be able to contradict the High Court in London but the issue of jurisdiction is complex.

“They don’t have to stop. A U.S. court only has to listen to a court above it,” said Stephen Lubben, a law professor at Seton Hall University School of Law in Newark, New Jersey.

“There is no obligation for the Texas court to follow the British court but when you have a pre-existing British case involving a British company I think the right thing to do is for the Texas court to back down,” Lubben said.

Hicks and Gillett are hugely unpopular with Liverpool fans due to the club’s debt problems and Friday is also deadline day for the refinancing of the debt they have piled on the club.

Should the debt repayment not be made, Liverpool risk being taken over by RBS who could conduct the sale themselves.

That might result in the holding company of the club being briefly put into administration which carries

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