Tom Hicks loses second Liverpool damages claim
Liverpool’s new owners and the Royal Bank of Scotland are confident that they will not face a damages claim from former owner Tom Hicks.
Losing out: the High Court rejected an application by Tom Hicks to overturn a ruling preventing him seeking damages in the United States Photo: PA
By Paul Kelso, Chief Sports Reporter 9:14PM GMT 17 Feb 2011
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The High Court rejected an application on Thursday by Hicks to overturn a ruling preventing him seeking damages in the United States.
Lawyers for the RBS believe the outcome makes it unlikely that they or the club’s new owners, New England Sports Ventures, now Fenway Sports Group, will face legal action from Hicks.
Liverpool were sold to NESV against Hicks’s wishes last October in a deal he described as “an epic swindle”. Hicks believes that there were more lucrative offers available and maintains that he and former partner George Gillett lost £140 million on the deal.
The NESV takeover was approved only after Mr Justice Floyd rejected an injunction from Hicks to stop the sale, ruling that the club board, then chaired by Sir Martin Broughton, had the legal right to force through the sale of the club.
The majority state-owned RBS, which made millions in fees and interest from bank-rolling the Hicks-George Gillett takeover and propping up their ownership with loans of more than £350 million, insisted on Broughton having the casting vote on any sale as part of their final refinancing agreement with the Americans.
Having been defeated in the UK courts, Hicks issued a second action in a Dallas court seeking to block the sale, but was forced to withdraw it after Floyd issued a second injunction in October.
On Thursday the same judge rejected Hicks’s attempts to have this injunction overturned, and effectively endorsed the decision that damages could only be sought in the UK. “I am satisfied that the former owners have not shown any good reason why the injunction should be discharged,” Floyd said in his written judgment.
Several times in the judgment Floyd emphasises that jurisdiction for any legal action lies in the UK. One of the conditions of Hicks’s credit agreement with RBS was that any issues be settled in the UK courts, and it was also a condition of a corporate governance side letter imposed by the ban in April 2010, when they demanded the Americans find a buyer for the club.
Floyd also said that Hicks now accepted he had no chance of success in the British courts. “The former owners’ position, now, is that they accept that they have no realistic prospect of successfully showing that RBS were in repudiatory breach of the CGSL,” he wrote in a written judgment published on Thursday morning.
Floyd did vary the injunction slightly, allowing Hicks to sue for disclosure of documents and information relating to the sale of the club in the US, but only if it is in support of a UK court action.
The judge also gave Broughton and NESV permission to seek permanent protection against any damages claim from Hicks, technically known as “negative declaratory relief”.
In a statement Liverpool welcomed the judgment: “We are delighted that Mr Justice Floyd has granted the applications requested by Sir Martin Broughton, RBS and NESV and that the anti-suit injunction prohibiting the former owners from commencing legal actions against these parties outside the EU has been upheld and clarified.
“Sir Martin, RBS and NESV continue to maintain that there is no basis to challenge the propriety or validity of any actions by them or any of those involved on their behalf in the sale of the club. They will continue to take all steps necessary to defend vigorously any litigation threatened or commenced by the Club’s former owners.”
Hicks has previously indicated his intention to sue in the US suggesting damages could reach $1 billion, but said in this case that he had not decided whether to proceed.
A spokesman for Hicks said he was considering the implications of the judgment and would take legal advice before deciding on next steps. Hicks is understood to maintain that he has cause for complaint. “He just wants his money back,” said a source.
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