Liverpool Await High Court Ruling

A High Court ruling on the future ownership of Liverpool Football Club is set to be announced by Mr. Justice Floyd at 1000 BST on Wednesday.

The judge will make his decision having heard arguments from both sides at a packed court 16 on Tuesday.

Royal Bank of Scotland (RBS), the club's major creditor, is trying to force a sale that owners Tom Hicks and George Gillett are objecting to.

The American duo bought the club in 2007 but owe RBS £240m.

Hicks and Gillett are blocking the £300m sale to New England Sports Ventures (NESV), saying it undervalues the club.

Richard Snowden QC for RBS said at the hearing Hicks and Gillett were in "breach of contract" and guilty of "breathtaking arrogance".

It was also argued in court by the legal team of Hicks and Gillett that the deadline for refinancing or repaying the £240m debt is not Friday, 15 October but Monday, 1 November.

There were fears that, if the deadline was this Friday, RBS - which is 70% owned by the British public - could take control of Liverpool and place the club's holding company into administration.

That would almost certainly result in a nine-point penalty and might prompt NESV to walk away from the deal - leaving the club and RBS with no potential buyers.

As Tuesday's hearing got under way on a day of drama, BBC News revealed rival bidder, Singapore business tycoon Peter Lim, had increased his offer to £320m in cash for the club and its liabilities, plus pledging £40m for players.

And during the court deliberations, Hicks and Gillett's QC said there was a third bid to buy the club from hedge fund group Mill Financial, which would pay off the Reds' debt and commit £100m to a new stadium.

The key issue for the hearing to resolve is whether chairman Martin Broughton has the authority to sell Liverpool to NESV against the wishes of the current American owners.

Broughton claims when the owners decided to put the club up for sale in April, RBS requested undertakings from them that only he - as independent chairman - could make changes to the club's board.

That was to prevent the two Americans blocking any sale as the format of the board meant Broughton, managing director Christian Purslow and commercial director Ian Ayre could outvote Hicks and Gillett three to two.

However, minutes before a meeting last week to discuss the bid by NESV, which will clear all debt but leave the owners with losses of £144m, Hicks tried to sack Purslow and Ayre and install his son, Mack, and Lori McCutcheon, who works for Hicks Holdings.

Broughton rejected the proposal and continued with the meeting, with the England-based board members coming down in favour of the NESV bid.

Hicks, however, has denied there are such undertakings in place, and insisted Broughton's actions were illegal and therefore the sale to NESV - which is partly owned by Boston Red Sox proprietor John W Henry - is invalid.

In court, Snowden told Mr. Justice Floyd that Hicks and Gillett were committing "a calculated breach of contract" by seeking to change the constitution of the board without the consent of the bank.

He said they were doing this in order "to frustrate the sale necessary to repay the bank £200m by this Friday".

Hicks and Gillett's legal team admitted they had broken corporate rules in their attempt to keep control of the club.

But they argued the Americans had been forced to do this after the board failed to consult them properly and to consider other, potentially more lucrative, offers for the club.

Ahead of Tuesday's hearing, RBS secured an injunction to prevent them sacking Broughton or any other board members.

Snowden said that reconstituting the board "would derail the carefully planned process designed to achieve a sale of the club in a timely manner."

That process, he added, would avert the prospect of Liverpool going into administration and losing nine points.

Mr. Justice Floyd was also asked to impose injunctions on Hicks and Gillett requiring them to restore the original constitutions of the companies and managing directors, therefore removing the final stumbling block to a takeover.

But the new Lim bid could become a further complication.

"What may excite Liverpool's fans is that Mr. Lim is also saying he'll provide £40m in cash to Liverpool manager Roy Hodgson to purchase players during the January transfer window," stated BBC business editor Robert Peston.

"Liverpool's board will find it difficult to ignore Mr. Lim's new offer, raising yet more uncertainty about the ultimate fate of the football club."

BBC sports news correspondent Dan Roan added: "What this does is introduce a whole new element into this debate. It may mean certain people at Liverpool, for example Hicks and Gillett, have a little bit more support for their argument that NESV isn't necessarily the best route for the club to take."

Meanwhile, Henry has started his dialogue with Liverpool fans by expressing his hope that the ownership issue is "sorted out soon".

On Tuesday morning the 61-year-old futures and foreign exchange trading adviser wrote on his Twitter page: "Hello LFC supporters. Everyone is hoping for the best. There have been enough twists and turns. Hopefully all gets sorted out soon; LFC moves forward.

"It would be inappropriate and presumptuous at this time to respond to questions. In the interim, we're all rooting for the same thing."