LONDON — Liverpool's takeover by the owners of the Boston Red Sox will not go ahead if the English club is forced to enter a form bankruptcy protection and gets penalized in the Premier League standings, people with knowledge of the negotiations said Saturday.
Liverpool is already in the three-team relegation zone after its worst start to a season in more than 50 years, and would receive a nine-point penalty from the Premier League if it became insolvent before the Boston deal was completed.
A penalty could doom Liverpool to dropping down to English soccer's second tier, and would cause New England Sports Ventures, which owns baseball's Red Sox, to walk away from the deal, two people with knowledge of the negotiations told The Associated Press. They spoke on condition of anonymity because neither side is discussing the situation publicly.
The club could avert financial administration if three Liverpool board members persuade a London court next week to force co-owners Tom Hicks and George Gillett Jr. to sanction the 300 million-pound ($476 million) sale to New England Sports Ventures.
Hicks and Gillett will claim the trio don't have the power to approve a takeover bid which they said "dramatically undervalues" the club.
But if the court rules in favor of Hicks and Gillett, the pair must repay the team's bank debt by next Friday to prevent the Royal Bank of Scotland taking control of Liverpool and potentially placing the holding company for the club in administration, a form of bankruptcy protection.
A third person familiar with the negotiations said that, in this scenario, NESV could try to secure a cheaper deal to buy the 18-time English champions.
Meanwhile, before accepting NESV's bid earlier this week, Liverpool's board also considered an offer from an unidentified Asian consortium. And even though it has approved NESV's potential takeover, the Premier League is still carrying out the same checks into the suitability of the Asian group to run the club.