Damages claim will be very difficult, warn legal experts
TOM HICKS and George Gillett turned to US courts after Mr Justice Floyd’s emphatic verdict in the High Court gave them virtually no chance of appeal and only a slim hope of pursuing a claim for damages, sports law experts told City PM
The judge’s verdict that the Liverpool owners were not entitled to sack members of the board in an attempt to block a sale to New England Sports Ventures paved the way for Liverpool to push ahead with the deal last night.
“It was a significant victory for RBS and Liverpool,” said Andrew Nixon, of Thomas Eggar. “One couldn’t rule out Hicks and Gillett giving consideration to a damages claim because they believe £300m is less than what the club is worth. Realistically, it’s going to be very difficult.
“If they were going to bring a claim it would be based on an argument the board did not do their duty in going through due diligence or considering other bids. But the judge has endorsed the approach of Martin Broughton and the board.”
Graham Shear, a partner at Berwin Leighton Paisner, said Liverpool’s obtaining of legal and financial advice during the process of selecting a preferred bidder will count in their favour. He said: “At this stage the only recourse Hicks and Gillett have is a damages claim if they can prove they have suffered a loss from missing out on a higher or more advantageous offer. I can’t really see that as Barclays Capital was providing the board with advice on complicated offers.
“I wouldn’t be surprised if Hicks and Gillett carry on fighting because they have lost a lot of money. But on the basis of the arguments in court the judge did not have a difficult decision to make.
“Their admission that they breached the undertaking agreements regarding corporate governance removed a potential factual dispute and provided the judge with a lot of assistance.”