When Gillett and Hicks drove Liverpool into debt and were forced out

The BITTER battle for Liverpool: Ten years ago, hated owners George Gillett and Tom Hicks were driving a mighty club into mediocrity and debt… they were forced out, but not without a fight

  • Liverpool’s future was decided dramatically in the High Court in October 2010
  • That ended five months of back and forth as the club descended into chaos 
  • American owners George Gillett and Tom Hicks were completely bust 
  • The club’s sale was eventually completed to Boston Red Sox owner John Henry

There will be more than one piece of perfect symmetry when the season restarts and Liverpool claim the title, 30 years after their last one.

The club’s return to the summit will have come precisely 10 years after the titanic, bitter, often excruciating five-month struggle to wrest the club from two of British football’s most dreadful owners and deliver it to the new proprietors who have provided salvation.

That 2010 battle saw Liverpool in the High Court, with those there to report on proceedings meandering past signs for the ‘Peter Andre v Katie Price’ legal case before reaching Court 16, where the club’s destiny lay.

Liverpool chairman Martin Broughton outside the High Court in London 10 years ago

George Gillett (left) and Tom Hicks (right) could not refinance loans used to buy the club

The journey to that endgame began on a desultory Sunday in Hull when Liverpool’s 0-0 draw with Iain Dowie’s relegated side said everything about their rudderless drift into irrelevance.

The club accounts had been published 48 hours earlier, revealing record losses of £54.9million, which included interest payments of £40.1m and a stunning £472.5m owed to creditors.

This is what American owners Tom Hicks and George Gillett had reduced the club to. They were bust; unable to refinance Royal Bank of Scotland loans which they had used to buy the club. ‘That day in Hull was about as bad as things got,’ says a club insider. ‘Desperate.’

The transfer budget had gone and Rafa Benitez was about to follow it. Nabil El Zhar was somehow sharing a pitch with Steven Gerrard as the Reds ended the season seventh.

The Americans were determined to cash out handsomely. Hicks, all swagger, wanted £800m for the club. When a New York private equity firm, Rhone Group, offered £118m for a 40 per cent stake that April, he and Gillett turned them down.

RBS, already feeling the heat from fans for bankrolling these owners, were incandescent. They replaced Rothschild and Merrill Lynch — Hicks and Gillett’s choice — with Barclays Capital, who launched a search for a buyer and appointed Martin Broughton as independent chairman.

He was bestowed with the power to overrule the Americans but was told that if a new buyer was not found by October, Liverpool would be in administration.

Hicks had grown complacent about his control at Anfield. He had inveigled his way into co-owning Liverpool because seller David Moores, scion of the Liverpool Moores dynasty, lacked curiosity. Basic internet searches were ‘as likely to mislead as inform’, Moores insisted. But Broughton was a tougher nut.

The turmoil came to light at the end of a season when Steven Gerrard’s side finished seventh

Behind the public-school demeanour and non-combative style — ‘he was no teacup thrower,’ says one associate — was determination. He left school at 18 with mediocre exam results and only realised his potential when he came 41st in a field of 3,000 students sitting national accountancy exams.

Broughton’s first engagement with bidders came exactly 10 years ago when he met a Chinese internet gaming tycoon, 43-year-old Zhu Jun, in Hong Kong and Shanghai. 

Broughton was leak-proof and that made reporting the search for a buyer — the story of that summer — a challenge. ‘He knew the media game. He wouldn’t be flattered into talking,’ says a source who worked with him at the time.

That reticence was not shared by Hong Kong investment banker Kenny Huang who, frustrated with Liverpool’s insistence that they wanted a month to check out his books, went public to say he was fronting a Far East consortium. 

On August 5, The Times’ front page headline was ‘China set to buy Liverpool’, naming the mystery backer behind Huang as China Investment Corporation. Broughton was unimpressed. 

‘He’d not even seen an offer from Huang then,’ says the source. Huang’s narrative unravelled.

Claims he had made about studies at American universities, part-ownership of an NBA basketball franchise and having a seat on the board of the fourth largest bank in China failed to check out.

Broughton (right) first met Chinese internet gaming tycoon Zhu Jun about a bid in June 2010

Three days before the RBS deadline, Broughton had two bids to save Liverpool Football Club

When Hicks tried to bypass Broughton and refinance through US equity firm Blackstone Group, and so stay on, fans responded with an email protest — 14,000 were sent to the company. The club made the front of the Wall Street Journal. 

‘A Texan Tycoon Learns a Lesson; Don’t Mess with Liverpool fans,’ the headline stated.

‘A lot of the talk about buyers wasn’t worth the ink because the genuine prospects don’t talk,’ says the source. ‘Martin always said the world would hear from him when there were genuine bids.’

And so it came to pass. Three days before the RBS deadline, Broughton told Hicks and Gillett he had two bids — Singapore businessman Peter Lim and Boston Red Sox owner John W Henry — and a board meeting had been set to consider which to accept.

Hicks and Gillett tried to reconstitute the board — a breathtaking strategy involving removing then-commercial director Ian Ayre as well as MD Christian Purslow, now Aston Villa’s chief executive, and replacing them with Hicks’s youngest son Mack and Lori Kay McCutcheon, financial controller of Hicks’s holding company. The new board members’ names were filed at Companies House.

This manoeuvre sent Liverpool into the oak-panelled precincts of Court 16. 

Broughton needed a High Court judgement to validate the sale to John W Henry (centre)

Boston Red Sox owner Henry tours Anfield on his first day in charge on October 16, 2010

Broughton and the club’s English directors had ignored the American move and voted for the Henry bid but needed a High Court judgement to validate the sale.

The ensuing events were like few seen at the Strand’s Royal Courts of Justice. Liverpool shirts and scarves were draped around the public gallery, where fans awaited the presence of Mr Justice Floyd. 

But it was the club’s QC, Lord Grabiner, who stole the show with his deadpan wit — deliberately mispronouncing Gillett’s name and belittling the owner’s son by calling him ‘Hicks Minor’. He was cheered along the Strand when Broughton won.

There was a final, desperate play from Hicks and Gillett. They went to an obscure American judge — Jim Jordan of the 160th District Court in Dallas — to obtain a restraining order, riddled with spelling errors, blocking the sale of the club on grounds that RBS had bullied directors into the sale against their will.

Hicks’s lawyers claimed the Texan jurisdiction was valid because it considered damage done to a US corporation.

So Liverpool went back to the High Court, where the Dallas order was given short shrift.

Henry looks at the European Cup at Anfield, a competition they would win again in 2019 

The Red Sox owner holds the World Series trophy during celebrations after their 2007 victory

It was lifted and within four hours of the RBS deadline the club was sold. The new owners wiped out the club’s £200m debt at a stroke.

The big, fat ring Henry wore at Anfield a few days later was the only sign of ostentation in an individual whose arrival — which began with a solitary, reflective walk on the hallowed turf just after sunrise — was so much more understated than all that Hicks and Gillett had brought.

This was no ordinary adornment, though. It was a World Series ring he won as Boston Red Sox owner and it was an emblem of what motivated him.

‘Competing,’ as he put it. ‘You can destroy teams in a short period but it takes a long time to build a strong foundation. We’re very patient — but aggressive.’

And so it has come to pass.

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