RBS Asks Judge to Reverse Changes to Liverpool Board

(Updates with ruling expected tomorrow in seventh paragraph.)

Oct. 12 (Bloomberg) -- Royal Bank of Scotland Group Plc asked a London judge to reverse changes to Liverpool’s board that would block the soccer club’s planned sale to New England Sports Ventures LLC for 300 million pounds ($474 million).

Owners Tom Hicks and George Gillett have sought to halt the sale of Britain’s most successful team, saying the price is too low. Fans have protested their ownership and RBS says the Americans breached their contract when they tried to replace independent board members who approved the sale.

The case “concerns what is an admitted breach of contract by Mr. Hicks and Mr. Gillett” done to “frustrate the sale process,” RBS lawyer Richard Snowden said at the High Court in London today.

The move showed “breathtaking arrogance,” he said.

RBS is trying to push through an offer from the New England group controlled by Boston Red Sox owners John W. Henry and Tom Werner. Liverpool, which has won 18 domestic titles and five European Cups, has had its worst start in more than 50 years. The team is in 18th place and threatened with relegation.

RBS, which required Hicks and Gillett to add independent board members when they last refinanced debt, brought the suit. The Edinburgh-based bank wants the court to issue an injunction forcing the men to abide by the contract and restore a “clearly functioning” board that can act in the best interest of creditors, Snowden said.

Justice Christopher Floyd is scheduled to give his judgment at 10 a.m. tomorrow.

Paul Girolami, the lawyer representing Hicks and Gillett, told the court his clients weren’t trying to put a “spanner in the works” and that the board hadn’t properly considered other offers. Hicks and Gillett were improperly sidelined from the sale negotiations, Girolami said.

Hicks and Gillett, who bought the team in 2007, have to repay a 237 million-pound loan as well as costs associated with an April 30 refinancing that has seen the debt balloon by 40 million pounds. They may lose 140 million pounds if the proposed deal goes through, club chairman Martin Broughton has said.

Singapore billionaire Peter Lim today offered to buy the team for 320 million pounds, trumping the NESV offer, and said he would provide another 40 million pounds to purchase new players.

The case is: The Royal Bank of Scotland Plc v. Thomas O Hicks, George N Gillett, KOP Football (Cayman) Limited, KOP Football (Holdings) Limited, KOP Football Limited; HC10C03206; High Court of Justice, Chancery Division.

--Editors: Christopher Scinta, Chris Elser.

To contact the reporters on this story: James Lumley in London at jlumley1@bloomberg.net; Tariq Panja in London at tpanja@bloomberg.net

To contact the editors responsible for this story: Christopher Elser at celser@bloomberg.net; Anthony Aarons at aaarons@bloomberg.net.

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