FORMER Liverpool FC managing director Christian Purslow described selling the club to New England Sports Ventures as a “bottom of the barrel” deal, it was revealed in court yesterday.
In a sensational email sent just a month before the deal with NESV was completed, Mr Purslow told LFC board members:
He did not believe NESV had the money for a new stadium.
Their bid was at the “extreme bottom end” of what was wanted.
John Henry’s background as a hedge fund financier “could not be worse” for PR.
The only positive was that they “existed”.
The email was disclosed by Tom Hicks and George Gillett’s legal team as they try to have an anti-suit injunction stopping them from suing for damages outside the UK or European Union lifted.
They want to show that the deal accepted for LFC undervalued the club and ignored other, higher offers.
It is not known whether Mr Purslow changed his mind about the deal or if it improved in the month before the sale.
The email was sent to fellow LFC directors Ian Ayre, Phillip Nash, and then chairman Sir Martin Broughton on September 15 last year.
Mr Purslow urged the trio to “avoid the natural temptation to jump straight into the deal with NESV”, and then lists all the negative elements in their bid.
He wrote: “So what is positive? Answer, they exist. Which is not a lot, but it is not to be underestimated in importance.”
He then suggests they “double check that none of the possibles who have come and gone in the past 18 months to apparent levels lower than Sharjah but higher than NESV are not there.
“So I repeat this is a bottom of the barrel outcome.”
The Sharjah reference is though to refer to an alleged £600m bid for LFC from the Middle East.
The club is back in court as Sir Martin, RBS, and NESV are asking the court to extend indefinitely an injunction stopping Hicks and Gillett suing for damages abroad.
The injunction was taken out when Mr Hicks launched a $1.6bn lawsuit in Dallas trying to halt the £300m sale of the club in October last year.
Hicks and Gillett want the restriction removed leaving them free to pursue a legal claim in the USA.
Earlier the court heard from David Chivers QC, acting for NESV, who said Hicks and Gillett were cynically trying to manipulate international law in their pursuit of damages.
He said the pair had not proved why a court order stopping them suing for damages outside the UK or the EU should be lifted.
“They are simply cynically trying to manipulate two legal process, one in each jurisdiction,” Mr Chivers said.
He said Hicks and Gillett need to make clear why they wanted the restriction lifted, but had so far failed to do.“The appropriate place for the dispute to be heard is in England, he added.
In the morning Sir Martin’s barrister, Philip Marshall QC, returned to the issue of how Hicks and Gillett had sought to mislead the Texas court.
“The conduct in Texas was quite extraordinary,” he said.
Lawyers acting for Hicks and Gillett told the Texas court they needed an injunction to stop the sale of the club and that no other injunction had been sought – despite the fact that just hours earlier a UK court had refused their request.
”I find it just incredible. It was utterly dishonest.”
He said he was not criticising the American lawyers because they were under instruction from Hicks and Gillett. But he said it amounted to oppressive and vexatious behaviour.
“Now they are trying to restart US proceedings trying to seek tactical advantage, seeking punitive damages, when England is overwhelmingly the appropriate forum for this dispute.
“It has been indicated (via interviews) that he is determined to sue and embroil the club in litigation for a long period of time.”
Sir Martin Broughton is also asking the high court to confirm that he acted “honestly and reasonably” in the £300m sale of the Reds to NESV.
Both Mr Marshall and Richard Snowden QC, for former bank creditor RBS, have also stated they are entitled to rely on “exclusive jurisdiction” clauses in previous agreements that mean the case should be heard in England.
This is disputed by Hicks and Gillett, who claim the clauses should not prevent any claims being brought abroad.
Paul Girolami QC told the court that Hicks and Gillett’s holding companies Kop Football Cayman and Kop Football Investments (registered in Delaware) through which they once controlled LFC, had separate rights to those of the two Americans.
“You are in danger of being seduced by my learned friends’ submissions that this is just an English case. But it is not at all obvious that it is just an English case.”
He said it was not fair for RBS to say it did not want to be involved in cases abroad merely because it was inconvenient.
“RBS is not a little old lady that does not branch or has an inability to fight cases abroad.”
He drew the court’s attention to a letter of appointment for Sir Martin when he was made chairman of the club last April.
It was on Kop Investment headed notepaper that said Sir Martin was liable, for his responsibilities as a manager of the company, under Delaware corporate law, and that any disputes arising from his appointment were to be dealt with under English law.
“Sir Martin is asking you to decide now that this could not properly be a Delaware case.
“I am not suggesting that a claim is about to be launched against Sir Martin under Delaware law. What I am suggesting is that it is not as simple as is being suggested to you (by the other side).”
He then went on to say that Hicks and Gillett needed more time to formulate their case and were investigating a number of issues. He then revealed a number of emails. The first dated August 22, 2010, from Phillip Hall of Inner Sports, acting for NESV, asked Sir Martin to keep their communications “confidential from the current owners”.
Sir Martin sent an email confirming that this was fine.
Mr Girolami said an email between lawyers on September 9 spoke about a share purchase agreement to buy the club.
“I am not seeking here to make any allegations of conspiracy. I am not saying that it is necessarily wrongful, we are trying to reconstruct what actually happened.”
He then revealed the Purslow email, dated September 15, and said that at this point his clients were still unaware of what was going on.
Indeed it was not until after Sir Martin had called a board meeting for October 5 to ratify the deal that Hicks and Gillett became aware of NESV, Mr Girolami claimed.
The pair have recently been told by lawyers acting for Sir Martin that they have 75,000 emails involving the sale.
It may take some time for these to be reviewed for disclosure, Mr Girolami said.
The judge challenged him saying that it had been four months since Hicks had made his “epic swindle” allegations.
“I question how long he is going to be able to do that before he has to put up or shut up,” Mr Justice Floyd added.
WHAT PURSLOW TOLD LFC BOARD IN EMAIL
“TO GET it straight, I think we should avoid the natural temptation to jump straight in to the deal with NESV. Whilst they are charming, intelligent and credible their bid is by any standards at the extreme bottom end of the of the ‘right deal’ threshold we set for ourselves: it only reduces debt by less than half and is I feel unlikely to yield incremental equity to fund a stadium.
“They may say they have money if necessary but I do not take this very seriously. Their eyes only lit up at the idea of other opportunity improvements. An American deal guy simply can't avoid using other people's money if they can.
"There is no extra money on the table to enable short-term investment in what remains a squad palpably needing more quality if we are to be definitively top four. New American sport team owners with the senior guy being a hedge fund manager could not be worst from an image standpoint, which is an issue for us independents. I have not even talked about valuation. I leave that to other members of the board.
"So what is positive? Answer, they exist. Which is not a lot, but it is not to be underestimated in importance."
He then suggests they "double check that none of the possibles who have come and gone in the last 18 months to apparent levels lower than Sharjah but higher than NESV are not there.
"So I repeat this is a bottom of the barrel outcome," he ends.
Read More
http://www.liverpoolecho.co.uk/liverpool-fc/liverpool-fc-news/2011/02/11/christian-purslow-slammed-nesv-deal-to-buy-liverpool-fc-a-month-before-the-sale-100252-28154014/4/#ixzz1DeNODGmx