And on the bright side...

[Montse]

Nathan Vardi

 

Mill Financial Sues George Gillett Personally For $117 Million Over Liverpool Loan

Nov. 19 2010 - 3:20 am | 2 views | 0 recommendations | 0 comments

 

Image by AFP/Getty Images via @daylife

Lending firm Mill Financial has sued George Gillett Jr. for breach of guarantee, claiming the Colorado financier personally owes $117 million that was connected to his investment in the Liverpool Football Club.

 

In a 12-page complaint filed on Thursday in Manhattan’s New York state court, Mill Financial claims Gillett is personally liable, together with some of his business entities, under a guarantee of a loan that Mill Financial alleges has come due. Mill Financial filed in court a copy of an unlimited guarantee signed by Gillett in 2008.

 

Mill Financial, which is based in Springfield, Virginia, reportedly refinanced a loan used by Gillett to buy a big stake in the famous Liverpool Football Club of the English Premier League in 2007. Gillett’s partner in the deal was Texas businessman Tom Hicks. According to the lawsuit, Gillett Football LLC borrowed $70 million in a January 2008 term loan from Mill Financial.

 

Mill Financial says in the court document filed Thursday that the loan became due on August 13 but had not bee paid in full. In the complaint, Mill Financial claims that Gillett and some of his business entities, like Booth Creek Management, issued guarantees that “‘unconditionally and absolutely guarantee[d]’ the “payment in full, promptly on demand.”

 

It appears, according to the lawsuit, that Gillett entered into a high yielding term loan that carried a 19% annual interest rate. In the month before the loan allegedly came due in August, the amount owed by Gillett Football LLC was $89.8 million. Mill Financial notified Gillett in August that the loan was in default. In early September Gillett Football LLC did make a $431,000 payment, but Mill Financial claims “this amount was not sufficient to cure the default.” After tacking on extra fees, Mill Financial claims the amount now due is $117 million.

 

Gillett, reached on Thursday night, declined to comment on the lawsuit. Mill Financial could not be reached for comment.

 

The potential of massive personally liability to businessmen stemming from personal guarantees made on corporate loans has become an issue recently. As I reported earlier this month, Moses “Mark” Stern, a little-known commercial real estate investor, personally owes Citigroup $126 million under guarantees for which the bank has recently obtained court judgments.

 

For Gillett, the Mill Financial lawsuit is the latest development in a saga that has gone on for months in courts from London to Texas. Gillett, together with Hicks, lost control of Liverpool FC in recent weeks, unable to stop the Royal Bank of Scotland, which financed their original purchase of the team, from selling Liverpool FC. The bank, which was able to sell the team because it served as collateral for the loans used to purchase it, sold Liverpool FC to Boston Red Sox owner John Henry’s New England Sports Ventures at a price that was lower than expected.

 

Mill Financial had reportedly emerged at one point with a bid of its own to purchase Liverpool FC, but was unsuccessful. Mill Financial’s loan to Gillett Football LLC was collateralized by Gillett Football’s interest in Football Investments LLC, court documents say, but it appears that collateral may have disappeared when the Royal Bank of Scotland sold the team.

 

At the same time as the Liverpool issue has been going on, Gillett’s Nascar venture, Richard Petty Motorsports, has reportedly been in financial trouble. Gillett did make a fortune selling hockey’s Montreal Canadiens in 2009.

Forbes

 

[Tosh]

Shame

 

 

 

 

 

 

 

as in shame it's not more or includes Hicks

[richwilks]

I personally feel sorry for George. Always liked him.

[Red Lecter]

Tick follows tock....

[mofus77]

I hope to one day walk down a street in the US to see this little scrote and his texan buddy sitting on the sidewalk begging for change. Then I will tell them all the wonderful things I'm going to do for them, including buying new friends, clothes and how everything will be great from here on. I'll even show them a picture of the state of the art home that I'm just about to start building for them.

 

Then I would steal their change cup and run off.

 

The c**ts.

[Rimbeux]

He's ruined, this leaves me feeling better

[Stew F]

Have a root round in your 'Euro pocket' for a few notes eh!

You insipid little gimp

[McBain]

As long he doesn't counter sue us/NESV in response as a desperate attempt to recoup some of the money

 

We need stability now not boardroom shenanigans

[Boca]

George reacts to the news he is being sued

[Chili Palmer]

Karma is well and truly a Bitch eh George?

[Andy @ Allerton]

I hope to one day walk down a street in the US to see this little scrote and his texan buddy sitting on the sidewalk begging for change. Then I will tell them all the wonderful things I'm going to do for them, including buying new friends, clothes and how everything will be great from here on. I'll even show them a picture of the state of the art home that I'm just about to start building for them.

 

Then I would steal their change cup and run off.

 

The c**ts.

 

[Tosh]

So he borrowed $70mm off Mill to refinance a loan used to buy the club. RBS also were financing the loan to buy the club (GG share being some £100mm)

 

So he's borrowed £135mm to buy 50% of a club for which he paid something less than £100mm (£190mm purchase price?)

 

and lost the fekking lot

[Swagger]

Hahahahahahahahahahahahahahahahahahaha.

[Frosty Jack]

Time for a new round of emails to Mill Financial, this time informing them of aspects to the case that their Lawyers might have missed and could be useful in court.