Potential Liverpool owner Kenny Huang was successfully sued for nearly $800,000 (£505,000) in damages by a former business partner after their relationship went sour.
The adverse court finding emerged as Huang was preparing to present Liverpool chairman Martin Broughton with an offer for the club and proof of funds ahead of a board meeting on Thursday that may decide the fate of the club.
Huang’s bid has been clouded in uncertainty since it was made public amid claims that it would be backed by investment from the China Investment Corporation, the Chinese state’s sovereign wealth arm.
On Tuesday Huang’s associate on the bid, Marc Ganis, added to the confusion, telling sportingintelligence.com that they had not yet decided whether to make an offer for the club and that no investors, including CIC, had yet been identified.
Huang is one of four potential bidders for Liverpool. Also understood to be considering offers are Syrian businessman Yahya Kurdi, who said on Tuesday he would not offer “one pound more” than the club are worth, New York investment house the Rhone Group, and the Kuwaiti Al-Kharifi family.
The Liverpool board are scheduled to meet to discuss any offers they receive on Wednesday having asked for proof of funds and detailed offers by then.
None of the potential bidders has yet provided proof of funds, though they are all understood to have been subject to background checks by parties involved in the sales process.
The adverse judgment against Huang was handed down in January 1999 by a circuit judge in Seminole County, Florida, and relates to a dispute with a former business associate, Yudong Zhang, and a company, T&K Guang Xin Enterprises.
According to the judgment, a copy of which has been seen by Telegraph Sport, Huang, then a resident of Las Vegas, was ordered to pay damages of $750,000 (£473,000) and interest of $788,300 (£497,000).
On Tuesday night a spokesman for Huang confirmed that the court had found against him in the case but declined to discuss what the source of the dispute was or the nature of the business venture.
Neither could he confirm whether Huang was appealing against the judgment, but he said Huang disputed that the money was owed to his former associates.
Huang has also recently won a legal dispute arising from his involvement in an attempt by a Chinese-owned car company to establish itself in the United States.
Huang was faced with suits for tortious interference with a business relationship, fraud, defamation and a breach of fiduciary duty brought by AutoChina Ltd, but won them all and was awarded $300,000 (£189,000) in damages earlier this year.
According to transcripts of the hearings, held in Miami in March, one of those behind the allegations was David Herzig, who is listed as a co-director in one of Huang’s firms, Aspen Infrastructure.
US Court records list Huang as being involved in several other court proceedings in the last six years. Huang’s spokesman said on Tuesday evening that he had not been found against in any of them, and that there were no outstanding legal proceedings against him.
“Mr. Huang’s focus is now on preparing QSL’s bid [for Liverpool] and he has briefed all of his advisers that he will be making no further comment at this point in time,” the spokesman said.
Earlier Ganis indicated that a bid was not certain. In an exchange with sportingintelligence.com, he said: “Among the most important points I have tried to get out is that no proposal [in relation to a Liverpool bid] has been made and no decision to offer a proposal has been made.
“There were many reports about CIC, yet at no time to [any] party, whether [to] the media, Sir Martin [Broughton] or Barcap, have we ever identified that CIC was an investor.”