Brighton chief executive Paul Barber admits Moises Caicedo refused to join Liverpool last week.
The Reds had an offer of 111m accepted by Brighton before Caicedo agreed to join Chelsea in a 115m switch.
"Liverpool are a fantastic club - you'd imagine anyone would be running up the M6 for the chance to play at Anfield," Barber told talkSPORT, "but for whatever reason, Moises and his advisors decided London was their preferred destination.
"In that situation we're in a difficult position; we've negotiated a British record deal deal and spent several days working with Liverpool - who were were professional throughout.
"At that point (when the player chooses not to go) we're out of the loop, it is all between the player and Liverpool. When it became clear he isn't going to be joining Liverpool, we have to go into a different mode, we then have to do it all again (negotiate a British record transfer), which we did.
"We started working with Chelsea, and we had to protect our own interests which is the player. We did that and now Moises goes on to the next step in his career."
And Barber was full of praise for the Ecuadorian midfielder, adding: "He's a fine player and he could be one of the best midfielders in the world he has that much potential."