Liverpool future hinges on Texas court

The bitter fight over control of Liverpool was set to continue in court Friday when a Texas court will decide whether or not to lift a restraining order that was blocking the sale of the English Premier League club to the owners of the Boston Red Sox.

The legal argument is essentially over the sale price. Current owners Tom Hicks and George Gillett believe the 300 million pounds ($476 million) bid by New England Sports Ventures, led by Red Sox owner John Henry, drastically undervalues the club.

Liverpool's other three directors back the sale, as a deadline looms before debts are due and the club faces being put into the hands of receivers.

"We have a binding contract. Will fight Mill Hicks Gillett attempt to keep club today," Henry posted on Twitter on Friday, referencing a rival late bid from hedge fund Mill Financial.

"Their last desperate attempt to entrench their regime."

On Wednesday, a state court judge in Texas issued a temporary restraining order blocking the sale to NESV, though whether he has the authority to do so is in dispute.

British High Court judge Christopher Floyd responded Thursday by saying the Texas action must be dropped, or Hicks and Gillett would be in contempt of court.

The next step saw Texas District Judge Jim Jordan schedule a hearing for 7 a.m. CDT (8 a.m. EDT and 1 p.m. in London) on Friday to hear a motion from NESV aimed at lifting the temporary restraining order.

"We are nearly there," Liverpool chairman Martin Broughton said. "We still have to take away the restraining order ... Mr. Henry is (still) very committed."

At a hearing in Dallas, NESV lawyers argued Liverpool was headed for default on its debt - and a possible nine-point penalty in the Premier League standings - if Jordan didn't decide by 10:01 a.m. London time Friday (5:01 a.m. EDT). Jordan resisted the urging of NESV attorneys to rule immediately on their request to lift the TRO.

"I want this issue to be resolved for the parties," Jordan said.

In London, NESV lawyer David Chivers said the sale would go through once the Texas case is withdrawn.

"We are the owners (of Liverpool)," Chivers told the High Court. "The owners from beyond the grave are seeking to exercise with their dead hand a continuing grip on this company."

The British judge said the legal action in Texas amounted to "unconscionable conduct on the part of Mr. Hicks and Mr. Gillett."

"This case has no real connection to Texas," Floyd said.

Richard Snowden, a lawyer for the Royal Bank of Scotland - which controls Liverpool's debts and has been trying to get the sale approved - told the High Court that the Texas ruling was "inappropriate" and should have no bearing.

Hicks and Gillett were not represented at the hearing.

"They are anxious to secure a second bite of the cherry in that famous jurisdiction, the Dallas County court," Snowden said. "We say the proceedings brought in Dallas are abusive, vexatious and oppressive. Having lost in front of your lordship, they have simply gone to another jurisdiction."

Hicks and Gillett's companies filed a motion in Dallas asking that RBS, NESV and Liverpool's independent board members be held in contempt in the U.S.

"Further showing their unlawful intentions and brazen disregard for their obligations, defendants have undisputedly - and, according to their statements, quite proudly - violated this court's temporary restraining order," the motion said.

Debts and liabilities resulting from Hicks and Gillett's leveraged purchase of the club three years ago have grown to around 285 million pounds ($453 million), which is owed to RBS and Wells Fargo by Friday.

Two others bids emerged this week - one from Singapore businessman Peter Lim and another from Mill Financial. Hicks and Gillett said on Wednesday there was also a bid from FBR Capital Markets for between 375 and 400 million pounds ($595 million to $635 million).

Lim said Wednesday he will not proceed with his bid because the board is intent on selling to NESV "at the exclusion of all other parties."

Liverpool faces a Friday deadline to repay its debts to RBS. However it seems unlikely that RBS would take the club into administration at this point, with a sale imminent.

Liverpool, an 18-time English league champion, is currently mired in the relegation zone after its worst start to a league season since 1953.