SWPISHOME said:
Hicks and Gillette took out a loan to buy Liverpool FC they didnt buy the club out of there own money.....
Hicks and Gillette have 9 more days to pay the debt to the RBS which is £237m, Broughton and Purslow were sent into Liverpool FC as Chairman and Chief Executive by RBS to find a new owner to remove Hicks and Gillette from the Football Club. So the American Owners have no say in whats going to happen to the Football Club unless they find themselves another shareholder to bring into the Club that can clear the debt in the next 9 days, So more or less Hicks and Gillette are clutching at straws because the Boston Red Socks deal will go through.
I don't think you quite understand the relationship betwene shareholders and directors and also the specific agreements reached between RBS, H&G and the other directors.
As far as I'm aware Hicks & Gillett own all or nearly all the shares in LFC and it doesn't particularly matter how they financed the purchase it that sense. So they are the owners at the moment. They are also directors. The other three directors (Broughton, Purslow & Ayres) are not shareholders.
Directors have a primary duty of care to their shareholders in the running and sale of a company and have to exercise their power in the supposed best interests of those shareholders. Where there's a conflict of interest (as there is here) involving an individual who is both a director and major shareholder (i.e. Hicks & Gillett) then those individuals should step aside from any decision making.
Therefore in one sense, the three remaining members of the board are quite able to make a decision to sell the club without H&G and I suspect the court will find in their favour quite easily. There were also supposed to be agreements in place to cover this situation and Broughton is claiming that H&G have breached these.
However there's then the issue of whether the board acted in the best interests of their shareholders by selling at too cheap a price so a court will have to decide whether the price they accepted was fair and reasonable in the circumstances. H&G will presumably claim not and Broughton will claim it was. The likelihood (in my eyes) is that H&G will lose again. See m'learned friend Projectriver's posts for why.
However, this could all be short-circuited by RBS's actions. The loan is due for repayment by 15 Oct and if H&G are in default they incur a penalty and RBS, as a creditor, can call in the administrators to Kop Holdings (not LFC). They (the adminstrators) will then be able to sell it. It might also be that RBS can take over the shares in the event of a specified default, as could happen to the Glazers with their PIK notes.
