Thursday, 14 October 2010

Liverpool saga drawing to a close

It seems that practically the last spite action by Hicks and Gillett to delay the sale by the Liverpool board and RBS has failed:

The Indy has several pages on the story of the decline of the club, including this one by Nick Harris. It seems that after the takeover, there was a crucial meeting in a hotel room in Marseille in December 2007. "Those present at the meeting included Gillett as well as the former Liverpool chairman, David Moores, and the former chief executive, Rick Parry. Gillett asked Moores and Parry to sign up to a 'whitewash', The Independent can reveal.

"At the time, a 'whitewash procedure', which is no longer allowed in law, would have allowed Hicks and Gillett to move their acquisition debt – run up when buying Liverpool – on to the football club's books, as long as serving directors gave written guarantees about debt repayments among other things.

"Hicks and Gillett had borrowed money to buy Liverpool and laden that debt on to a holding company. Now they wanted to shift it to the club itself, en masse. Moores and Parry felt Liverpool's income was already being used to fund the Americans' takeover, contrary to what they had promised. So they refused to sign up to the whitewash to put the debt directly on to Liverpool. 

"Hicks and Gillett, who even then were seeking to refinance the loans they took to buy the club, instead had to dip into their own wealth to smooth the refinancing. They also had to provide further personal guarantees on the loans. It was not so much a slippery slope as indicative of problems elsewhere. 

"Unbeknown to most, the credit crunch was threatening to bite both owners hard."

There are obvious political parallels.

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