In the Red – The Final Chapter?

On Wednesday 13 October the High Court ruled that the deal between Liverpool FC and New England Sports Ventures ("NESV") was legal, granting a mandatory injunction in favour of RBS. It was presumed at that time that the sale to NESV would go ahead unhindered.

Hours later the owners Hicks and Gillett managed to obtain a temporary restraining order against the prospective sale to NESV.

On Thursday 14 October the High Court again ruled in favour of Liverpool FC, granting an anti-suit injunction in respect of the Texas proceedings. An anti-suit injunction is quite rare; it essentially restrains someone from taking proceedings abroad. There are basically 2 grounds on which such an injunction might be granted, the first being if the agreement contains an exclusive jurisdiction clause. The second ground (upon which Mr Justice Floyd decided this case) is if it would be unconscionable or unjust to bring the proceedings out of the jurisdiction. Considering that the Club, RBS and potentially the sales agreement were all in the UK, it is arguable that the relevant legal jurisdiction was England and Wales. The anti-suit injunction gave the owners until 4pm on Friday 15 October to withdraw their action in Texas. If they had not complied they would probably have been held to be in contempt of court.

At 2.30 on Friday 15 October the Judge in Texas made an order dissolving the temporary restraining order as per both parties’ wishes. The motion for contempt was also withdrawn.

It was confirmed at 4pm that Liverpool Football Club had been sold to New England Sports Ventures (NESV.) There is on the horizon a threatened $1.6 billion lawsuit ostensibly to be brought by Hicks.

Published October 15, 2010

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