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Debt could force sale of Gerrard and Torres By Chris Bascombe, 17/10/2009 EXPULSION from Europe. A 10-point league deduction, ending any hope of a title challenge. The sale of major assets such as Fernando Torres, Steven Gerrard and Javier Mascherano. Welcome to the opening pages of Liverpool's 'Doomsday Book'. But this is no nightmare work of fiction. A document actually nicknamed The Doomsday Book was prepared as Tom Hicks and George Gillett flirted with catastrophe last season. It spelled out the consequences if the owners' failed to secure their £290million refinance deal. And it was only because the Royal Bank of Scotland feared a massive backlash if they allowed one of the world's biggest clubs to go into administration that Liverpool were able to reject a £70m bid from Manchester City for Fernando Torres. Unless the Americans sort out their differences and find investment before their next deadline, the threats will resurface. Club officials have consistently dismissed criticism of the Americans' reign as "scaremongering". But today Sport of the World can reveal it's scaremongering based on Liverpool going through the unprecedented, humiliating step of being forced to convince UEFA they qualified for a licence to play in the Champions League. In the aftermath of last year's qualified audit report by KPMG which cast doubt on the parent company's "ability to continue as a growing concern" Liverpool were summoned to the Premier League to guarantee they would resolve their financial difficulties. Both Liverpool and the Premier League agree it was a formality the Merseysiders' application would be successful, but the fact any questions were raised at all will shock the Kop. Liverpool face the genuine prospect of having to offer similar reassurances ahead of next year's UEFA competitions, something they'll be unable to do without the promise of a massive injection of cash. Urgency That explains why the club has been working overtime to present a healthier financial picture over the last few months, citing the £80m shirt sponsorship deal with Standard Chartered as a major step forward. It also explains the increased urgency to find investors. Privately, the club is adamant they will have new partners on board within six months. If they fail to do so, the consequences will be dire. It's likely the Premier League underestimated exactly how fraught the last refinance negotiations were. American bank Wachovia, now owned by Wells Fargo, was hesitant about agreeing its share of the loan, which amounted to around £62m. It needed a series of transatlantic flights ahead of the July 25 deadline to plead for an extension. RBS, the more enthusiastic of the lenders at the time, was initially only prepared to offer a six-month extension for the rest of the owners' loan. That would not have been enough to satisfy UEFA guidelines, as the Premier League needed assurance funds would be in place to keep the club afloat for the whole season. RBS made sure Liverpool dodged a bullet, but the gun is continually being reloaded. The bank is understood to be increasingly twitchy about their ongoing relationship with the Merseysiders. Hicks and Gillett maintained a united front to reassure their banks, but that has been exposed as a sham, with open hostilities resumed as the pair differ on the direction of the club. The Americans' accountants are trying to raise £100m for a 25 per cent stake in Anfield. Rothschilds and Merill Lynch want to issue new shares which would reduce Hicks and Gillett's holding to 37.5 per cent each. That injection would allow the owners to reduce debt levels and plough more funds towards one of the two Stanley Park plans or redeveloping Anfield. But the Americans can't even agree on this. Hicks is standing by a revised scheme which could lead to a 70,000-seater stadium. Gillett is still open to the idea of extending the existing Anfield site. Neither is likely at the moment. The prospect of taking a back seat while the main shareholders fight on is hardly enticing to potential investors. Recent interest from Saudi Prince Faisal exposed the massive rift. Hicks has made it known he won't veto his partner selling his 50 per cent stake to the Saudi, but that has never been on the agenda as far as Gillett is concerned and Hicks' stance does nothing to mend divisions. Gillett has often claimed he is not prepared to sell up unless it leads to both co-owners leaving Anfield. There have been farcical scenes in the Middle East with each owner pursuing the same investors but presenting alternate visions for the future of Liverpool. One City source said the owners were "virtually racing each other to get through the Saudi equivalent of Yellow Pages" in a desperate attempt to bring money into the club. A year ago, Merrill Lynch even approached Birmingham's outgoing owner David Sullivan to see if he was interested in Liverpool. An option explored by investors is to buy the debt directly off RBS. If the Americans' couldn't pay it back, the club would pass into the hands of those who own the debt. Liverpool have no shortage of suitors, but only at the right price. Gillett and Hicks paid £5,000 a share for Liverpool in 2007. Including £44.8m debts, this valued the club at £218.9m. Even in 2007, the deal raised eyebrows given the value of previous offers. The failed bid of Dubai International Capital (DIC) a month earlier valued Liverpool at £4,000 a share. In the summer of 2004, Wolves owner Steve Morgan valued Liverpool at £2,700 a share, equating to around £100m, and had shaken hands on a deal pending the outcome of due diligence. When that revealed the true extent of the club's debts he revised his offer, which was turned down by then chairman David Moores. Time Club officials insist comparisons between the club's value in 2004, 2007 and now are ridiculous, arguing Liverpool have vastly improved their revenue streams and value of their playing assets since then. They say securing top names on long-term deals has enhanced the club's value. Given the level of debt, convincing investors about this is proving a problem. Amid all this, Rafa Benitez's side face a crucial period. Euro progress and cash has been the key to Liverpool retaining their place as an elite club, making Tuesday's must-win clash with Lyon far more significant off the field than the clash with Manchester United next Sunday. Hicks and Gillett know they're running out of time. They're dreaming of a minority investor who's willing to pay off some of their debt and take a backseat while they continue to bicker on the way forward. But as the pressure mounts from their banks, conceding majority shareholding remains the easiest and quickest way to safeguard Liverpool's future - and avoid their 'Doomsday' scenario.

"Keane scored 4. Shame you never played them together Rafa" Even Rashid would wince at that one.

There's fevered specualtion about Xabi's future, but I think it is equally likely that Mascherano is also going to leave for either Barca or Madrid. He had a ropey start to last season, but was excellent after Xmas, so what are we going to do if he does leave? Option 1) Replace him with a new DM. Like who? Option 2) Don't replace him directly and stick with two "sitting" midfielders, but neither one actually a "proper" DM. One is Xabi (hopefully), who is the other? Option 3) Move Gerrard back into CM with Xabi. Option 4) As Option 2, but Lucas is the other sitting midfielder. Option 4 is clearly madness, but what would your course of action be if, as seems likely, Masher goes?