Liverpool will avoid a nine-point penalty if they fall under bank ownership next month. The Premier League will approve an Anfield takeover by the Royal Bank of Scotland if co-owners Tom Hicks and George Gillett don’t find a buyer or repay their debt by October 6th.
The RBS has had power to seize the club before but there were concerns about league sanctions. Fans feared that if the Americans defaulted on their loans the club would be plunged into administration, leading to a nine-point deduction. It looks therefore unlikely that there are any serious bids for the club on the boardroom table at this moment in time.
It seems that most potential investors are in fact biding their time until the club is absorbed by RBS and only then will they make an offer substantialy less than the £600-800 million that Hicks is looking for. Indeed, if RBS do takeover Liverpool FC, the dreaded Yanks will end up with nothing, something we should all rejoice in.
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The Club may not be in debted itself to RBS but we are to the business through which Hicks/Gillette which owns Liverpool Football Club. As such, and this is what is really worrying, they could seek to liquidate our assets to pay off what they owe to RBS
Like you say – “something we should all rejoice in” – it’s their own fault. Can’t see any new investers coming in before 6th Oct now knowing this, and RBS won’t want to hold onto the club so I could see them selling before the end of October.
that pair of welchers will not let go without a big profit, the club will be the losers again if they dont get their way.
We shall wait and see, although there are rumours that H&G will be required to pay a 60 million penalty should they fail to sell the club out of their own pockets. I believe that was a condition of the last refinance. I’ve always said any how, a smart investor will wait till H&G lose all bargaining power, and that will be if and when RBS stick to there word and actually take over from them
With the transfer window now closed, the assets in the playing squad can’t be liquidated can they? What are they going to do, sell Anfield?
Why you quoting a story from the Sunday scum NOTW. Not to be trusted. An can’t be true reds. Disrespectfull!
Mark, the transfer window will not impede any liquidation proceedings……look at Portsmouth (and others)
When the club was not taken over before transfer deadline this summer I couldn’t care less will the owners sell or if the bank will take over and sell the club.
It’s embarasing for the owners if the club is taken over by the bank but that’s their problem.
I only want the club to have new owners by the end of the year.
No more loan deals!
I think you will find the yanks have already pilfered plenty of money from the club as well as booked up huge costs against the club when visiting.
I hope your right about new owners and the bank i believe the yanks have already made their dough and they dont give a toss.
i dont think hicks and gilette are broke so thay will just pay the 36mill in order to retain liverpool so all this speulation is useless
Theres no way RBS will call time on H&G as it would put of other businesses using them for these large type loans on which they make millions each month.. H&G are here for a bit longer me thinks … Christ we need a saviour with a couple of billion to spare
hicks and gillett should beware and mr broughton for that matter, there will come a point (if we are not sold soon) when the fans will really turn and start hitting the club in the pocket, short term pain for long term gain, make no mistake these bastards will do anything, lfc means nothing to them
Redzer, H&G cannot simply pay off £36m and continue without batting an eyelid. The loan they took to refinance their ill-gotten deal has plenty of strings attached. They have got to either pay off a substantial part of the loan AND get RBS to agree a suitable realigning of the remainder or they have to sell so that the funds can be used to repay the loan.
If they do that before 6th october, they can keep the profit made. If it happens after 6th october then they are in default and RBS can sell the club to anyone who offers to buy at a price RBS is happy with. In practice that will mean an offer of £351m to pay off all outstanding debts. That leaves H&G with no profit but they can walk away without having a credit default against their name.
Remember, H&G cannot sell to the highest bidder even now. They can only sell if they get a majority vote in their favour between them and the other three directors on the board. If H&G say yes but the other three say no then they can hang on until RBS take control, send H&G packing and sell to someone with the right funds to input into the club.
That is the story, NOT one taken from a Sunday Rag!
Red Barron, Redzer, as an LFC fan and insolvency practitioner it’s a little more complicated than this. The RBS debt is repayable in full on 6th October and this was the deal that was struck in March. Part of that deal also gave the bank and independent chairman who has the casting vote on the board (and £60m of late penalty fees). There appears to have been much debate within RBS about the security of this loan and I believe this was their final facility to be offered to the club. However, the bank can not take over the club unless the directors approve it, and until now there has not been that facility. Effectively the way this is likely to play out is as follows, assuming H&G can not get incremental funding:
1) From end Sept, RBS will be advising full debt and fees are payable on 6th October and will be getting their advisors to tell the club that failure to be able to pay your debts as they become due means the club is trading whilst insolvent. From a Directors perspective, this is illegal and can carry a criminal prosecution.
2) Leading up to 6th October discussions will be brokered discussing the possibility of whats called a Company Voluntary Arrangement (CVA). This is usually seen as the 2nd to last option and needs the Directors to take a hard look at their company and their shareholders interests.
3) 6th October – A Board meeting will need to be convened and the clubs largest secured lender are unable to be paid, their is no white knight on the horizon the Directors face the prospect of knowingly trading whilst insolvent. They can either approve the CVA and pass ownership of the company to the Bank (perhaps through a pre-pack insolvency) or play hard ball with the bank and appoint their own administrators.
4) Club/Bank have sought approval that a CVA/pre-pack would not ilicit the 9point deduction from the PL, which has always been the main concern from the bank
5) Either way, if CVA actioned or Directors appoint the company is then run for the benefit of the creditors (and the shareholder (H&G) holding effectively holds no value). The administrator can then sell the assets of the company (the company being Kop Holdings as opposed to LFC) to whoever they see fit, as long as they can demonstrate they obtained the maximum return for the creditors. If every creditors position is covered in full, then H&G will have very little course for recourse – this is a proven and legally sound method of dealing with bank debt for equity enforced acquisitions.
They have a month! It’s going to be fraught, and will probably get worse before it gets better, but if no fool is prepared to lend them the money to pay off RBS and RBS don’t buckle (and I don’t believe they will), their tenure will be shortlived.
Sorry for the typo’s and spelling mistakes.
We had a ton of chances early to put the game out of reach. No excuse for not doing tonight what this offense should be expected to do every night: put up a minimum of 6 or 7 runs.