Creditors of Liverpool owner Tom Hicks have formally declared his company Hicks Sports Group in default on debts of $525 million (£351million). The figure was raised against his American sports interests the Dallas Stars ice hockey franchise and the Texas Rangers baseball team.
Hicks, who maintains that his American interests are entirely separate from his 50 per cent holding in Liverpool, was formally served with a default notice last week after missing a $10 million quarterly interest payment due on the loans.
The Texan financier is seeking to renegotiate the terms of the loans with a consortium of more than 40 banks led by Galatioto Sports Partners, a New York sports financing group that has lent HSG nearly $100 million.
Hicks insists that his decision to miss the payment is a negotiating tactic designed to force the banks to renegotiate in the light of the credit crisis.
The default notice signals the possibility that Hicks could ultimately lose control of the Stars and the Rangers, but a source close to Hicks said that would require the co-operation of National Hockey League and Major League Baseball commissioners, and that they were both supportive of the owner.
Hick's issues in the United States will raise further concern among Liverpool supporters about the club's future. Hicks and co-owner George Gillett are in negotiations with Royal Bank of Scotland over extending a £350 million loan secured in part against the club that comes up in July.
The pair are searching for a third-party investor willing to take a share in the club and help pay down the debt.
Hicks said he would continue to cover the cash needs of the two American franchises going forward while searching for fresh investors, but that he would not make interest payments until the banks come to the table.
"I'm confident that I'll be able to reach agreement with 51 per cent of the lenders because I will be able to fund all the cash needs of the two teams during the period that I'm bringing in new partners, which will help us to drastically reduce if not eliminate HSG's debt,'' Hicks told the Wall Street Journal.
Hicks, who maintains that his American interests are entirely separate from his 50 per cent holding in Liverpool, was formally served with a default notice last week after missing a $10 million quarterly interest payment due on the loans.
The Texan financier is seeking to renegotiate the terms of the loans with a consortium of more than 40 banks led by Galatioto Sports Partners, a New York sports financing group that has lent HSG nearly $100 million.
Hicks insists that his decision to miss the payment is a negotiating tactic designed to force the banks to renegotiate in the light of the credit crisis.
The default notice signals the possibility that Hicks could ultimately lose control of the Stars and the Rangers, but a source close to Hicks said that would require the co-operation of National Hockey League and Major League Baseball commissioners, and that they were both supportive of the owner.
Hick's issues in the United States will raise further concern among Liverpool supporters about the club's future. Hicks and co-owner George Gillett are in negotiations with Royal Bank of Scotland over extending a £350 million loan secured in part against the club that comes up in July.
The pair are searching for a third-party investor willing to take a share in the club and help pay down the debt.
Hicks said he would continue to cover the cash needs of the two American franchises going forward while searching for fresh investors, but that he would not make interest payments until the banks come to the table.
"I'm confident that I'll be able to reach agreement with 51 per cent of the lenders because I will be able to fund all the cash needs of the two teams during the period that I'm bringing in new partners, which will help us to drastically reduce if not eliminate HSG's debt,'' Hicks told the Wall Street Journal.
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