The antics of Hicks and Gillett have driven me to distraction. But, having correctly predicted Justice Floyd's ruling, I venture that Judge Jordan now sees the Plaintiffs for what they are: flim-flam men, who did not give him the whole story. Judge Jordan will end this charade tomorrow morning.
Last Saturday I posted In Re Liverpool: A Judge Predicts How The High Court Will Rule. With the invaluable help of Horace Rumpole, I explained how I would handle the forthcoming High Court case between RBS and the Liverpool owners, Tom Hicks and George Gillett. You can read it yourself, but I forecast that Hicks and Gillett were on a hiding to nothing and would be put to the sword before Mr. Justice Floyd. I appeared as a guest on World Football Daily on Monday and explored all contingencies with Steven Cohen and Kenny Hassan. Wednesday's ruling went exactly as I predicted.
Until about 8:30pm London time, that is. As a former prosecutor and as a sitting trial court judge for 8 years, I am cynical by nature. But even I didn't realize how utterly shameless Hicks and Gillett would prove to be. One can imagine Joseph Welch sitting across the table, beseeching them, "Have you no decency, sir, at long last?". I will not underestimate them again. The Texas filing takes the concept of chutzpah to a whole new level. Today, Mr. Justice Floyd called it for what it was: a shameless, cowardly attempt to abuse the court system for personal, venal ends.
So the British High Court has spoken. Where does that leave the Honorable James Jordan, in Dallas, Texas? He has adjourned the matter to tomorrow morning, where a decision is expected in short order. Here are the key points to consider for tomorrow:
Judge Jordan is neither a knave nor a fool. There has been predictable outrage to Judge Jordan's decision to grant the Temporary Restraining Order, but it has been unfair and over the top. When Liverpool's QC mocks Judge Jordan before the British judge, he may make the gallery laugh, but he's not doing his client any favors. People need to understand how this works. A trial court judge gets this type of request frequently. A party seeks a restraining order on an ex parte basis, and the immediate relief sought is temporary, pending a full hearing with both sides present. The jurist can only go by the information he's provided. A judge will often err on the side of granting the TRO, knowing that within a few days, the other side will have the opportunity to convince him to set it aside. If the lawyers are giving the judge a woefully misleading portrait of the facts in their pleadings, the judge can't know that at the time. I may not have granted it, but granting the TRO was not outrageous from the perspective of the judge. And he did not grant a blank check. Judge Jordan repeatedly added the word "solely" to the prepared order, making each paragraph state, "Based solely on the allegations.......". That may seem like a meaningless addition, but I see it as the judge emphasizing that the TRO is only as good as the ex parte representations it relies upon. Should those prove inaccurate, the Judge's decision regarding the injunction is foretold. Beyond that, the judge struck the owners' request to prohibit the defendants from "taking any action in any other court to effect or impede this lawsuit". Far from being a knave or a fool, this was a shrewd move by Judge Jordan, as it avoided a direct confrontation with the British court and left Justice Floyd room to maneuver.
Tom Hicks and George Gillett have been exposed as knaves and fools. As Justice Floyd stated today, there is no question that the Texas lawsuit was in the works while Justice Floyd was hearing evidence on the case in London. To avoid raising the issues in London, while searching for a friendly forum is outrageous, sanctionable behavior. And some of the allegations in the complaint beggar belief. Justice Floyd made clear that Hicks and Gillett had agreed back in April that only Martin Broughton had the power to alter the composition of the board. To knowingly breach that agreement, and to then argue in the Texas complaint that Purslow and Ayre engaged in ultra vires acts as a rogue board is so shameless it is literally breathtaking. It is equivalent to murdering one's parents and seeking mercy at sentencing on the grounds that you are an orphan. And my bet is that Judge Jordan is beginning to get a clearer picture of what is at work here. Two amoral leveraged buyout operatives, trapped in the worst era of de-leveraging in 100 years. They will say and do anything to avoid judgment day. Their complaints that the team is undervalued in the NESV bid will be familiar to anyone who knows the stories of Lehman Brothers, Long Term Capital Management or Bear Stearns. When the market turns against you, the market is never rational, it never is valuing your stock, asset or trade accurately. And if you're not leveraged to the hilt, you have a chance to ride it out. When you're leveraged, you can't play for time. That is what this case is about, and I believe Judge Jordan has figured that out.
Judge Jordan will rescind the TRO, and the Texas case will proceed as to damages. There is an easy way out of this conflict between jurisdictions, and this is it. Now that the judge sees he was sold a bill of goods, he sees the TRO is a bad idea. And he also now realizes that rescinding it does not prejudice Hicks and Gillett, even if their allegations are true. This is where I disagreed with Judge Jordan's issuance of the TRO. To obtain a TRO, a plaintiff must show a probability of success on the merits, no adequate remedy at law (damages) and irreparable harm if the relief is not granted. Hicks and Gillett have an adequate remedy at law. If their allegations are true, a jury could return money damages against the defendants. There's no need to hold up a sale for that. I believe Judge Jordan realizes this now that he's been adequately briefed. And he also realizes that a creditor (RBS) is owed some 237m by the debtors (Hicks and Gillett) and he was tricked into signing an order that prohibits the creditor from being satisfied through either a sale to NESV or, incredibly, by foreclosing on the collateral, i.e. repossessing the club from Hicks and Gillett when they don't pay by tomorrow. I don't think Judge Jordan is happy about the position Hicks put him in, and I don't think he's impressed that they didn't even show up in London today. Dismissing the TRO solves the immediate problem and leaves the litigants to litigate the damages issue, either in Dallas or London.
NESV has a binding contract to buy the team, and RBS will not take money from any of Hicks and Gillett's stalking horses. Kenny Hassan asked the obvious question on Monday: If Hicks and Gillett have until October 15th to pay off the debt, how can a sale take place before that deadline? Answer: because by that logic no sale could take place before October 15th. Because they could always claim they still had time to refinance. Once the Board lawfully made an agreement with NESV, Hicks and Gillett's ability to refinance ended.
That is why they are behaving the way they are. The fourth official (Justice Floyd) has signaled 4 minutes of injury time, and the referee (Judge Jordan) is looking at his watch. And when Judge Jordan calls time on this match, there will be no swapping of shirts and no acknowledgment of the fans. They stand exposed as charlatans, without dignity nor honor. Nothing will become their tenure like their leaving of it. And they walk alone.
Matt Switalski is a 16th Circuit Court Judge in Macomb County, Michigan and is the managing editor of
World Soccer USA. He appeared as a guest on World Football Daily on October 11 and October 14 to analyze the legal battle for Liverpool FC.
World Football Daily
