Ex-Liverpool owner sued over loan 22/11/2010 |
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Former Liverpool co-owner George Gillett is being sued for $117m over a personal loan he used to invest in the club.
Mill Financial alleges that Gillett and 12 of his companies are liable under guarantees made when the firm extended a $70m term loan to them in January 2008, according to a complaint filed at the end of last week in New York state court in Manhattan. The rate of interest on the loan was 19 per cent, the court filing said.
Gillett and Tom Hicks failed to prevent the £300m forced sale of Liverpool to Boston Red Sox owner John W. Henry’s New England Sports Ventures earlier this year. The sale led to Hicks and Gillett losing an estimated £140m.
The New York lawsuit “arises from the defendants’ failure to honour their obligations pursuant to the unlimited, unconditional, and continuing personal guaranties which they executed in favour of Mill Financial”, added the court filing.
In its complaint, Mill stated that the loan agreement was “amended several times” and the final date for full repayment was August 13. By July 15, the time of the last extension, Gillett owed $89.8m. Extra fees and legal expenses mean the amount now owed is $117.2m, Mill said.
While Gillett repaid $431,081 on September 9, “this amount was not sufficient to cure the default”, according to the filing.
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