IT EMERGED LAST night that Liverpool could still face a nine-point penalty from the Premier League if the club cannot stay out of administration.
The club – which is currently headed for a courtroom battle over the attempts of current owners Tom Hicks and George Gillett to avoid selling the club off at a loss – owes £283m to the Royal Bank of Scotland, in loans due for repayment before October 15.
If the debts cannot be repaid by that time, the club’s holding company Kop Holdings – the legal instrument set up by Hicks and Gillett to acquire the club – would be repossessed by RBS and most likely put into administration.
It had been thought that because it would be the holding company and not the club itself that would be put into administration, Liverpool could dodge the mandatory nine-point penalty imposed by the Premier League on clubs that lose control of their own affairs while members of the league.
It has now emerged, however, that the club could still face the penalty, because the League rules could also apply to companies whose sole business interest is the management of a member club.
One person familiar with the matter told the Press Association that it was “not completely clear whether the nine-point penalty would come into play but it would be a risk.”
West Ham example
Liverpool fans had hoped the fate of West Ham – which was owned by an Icelandic bank when it collapsed – could have been used as example. The Hammers had escaped a points deduction because it was not the club itself, but its parent company, which had hit the rocks.
In that case, however, West Ham was just one of a number of companies and was in itself solvent. That would not be the case in the example of Kop Holdings Ltd, which has no other function than to retain ownership of Liverpool FC.
The development could add further tension to Gillett and Hicks’ court case, which begins in the High Court next week. The two men are blocking the proposed sale of the club to New England Sports Ventures, a company which already owns the Boston Red Sox, because it would see them incur a £72m (€82m) loss each on their investments.
Although the current board of directors has approved the sale, the current owners have attempted to change some of the personnel on the board so as to swing any future votes in their favour.
The club’s current chairman, Martin Broughton – ironically appointed solely to find a buyer – says he was appointed on the provision that he alone would be able to change the membership of the board.
