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Judge rejects sale of Coyotes, move to Canada

Professional hockey will live on in the desert, at least for a while.

Billionaire Jim Balsillie failed in his bid to have a bankruptcy court judge order the Phoenix Coyotes sold to him and, over the NHL’s objection, moved to Hamilton, Ontario. His downfall was his self-imposed June 29 deadline for completing the deal.

Redfield T. Baum, chief judge of the U.S. Bankruptcy Court in Phoenix, concluded in a 21-page ruling June 15 there was no way to resolved the case by then.

“Simply put, the court does not think there is sufficient time (14 days) for all of these issues to be fairly presented to the court given that deadline,” the judge wrote.

The only one who didn’t see it as a defeat for Balsillie and a victory for the NHL was Balsillie himself.
“We’re still here,” Balsillie spokesman Bill Walker said, contending there was still an opportunity for the NHL and Balsillie to reach an agreement on moving the franchise to Canada.

At a news conference in Toronto on Tuesday, Balsillie’s intentions remained unchanged.

“He’s committed to Hamilton, he’s committed to Copps Coliseum,” Walker said. “He just sees this as another day at work, another day at the office.”

Balsillie is willing to negotiate with the NHL on bringing the Coyotes to Hamilton but the league has not approached him, Balsillie lawyer Richard Rodier said from Toronto. The lawyer added that the next step was to speak to Jerry Moyes, the Coyotes’ majority owner.

The NHL, however, prepared to move ahead to find a buyer who would keep the team in Arizona. Any sale would have to be through bankruptcy court, where Balsillie had been the lone bidder.

“We’re pleased the court recognized the validity of league rules and our ability to apply them in a reasonable fashion,” NHL deputy commissioner Bill Daly said Jun 15. “We will turn our attention now toward helping to facilitate an orderly sales process that will produce a local buyer who is committed to making the Coyotes’ franchise viable and successful in the Phoenix-Glendale area. We are confident that we will be able to find such a buyer for the Coyotes and that the claims of legitimate creditors will be addressed.”

The NHL has said it would relocate the team if no suitable ownership in Arizona is found. The league says four parties have filed preliminary applications to investigate purchasing the team and keeping it in Arizona. One of them is Jerry Reinsdorf, owner of baseball’s Chicago White Sox and the NBA’s Chicago Bulls.

The Coyotes have lost more than $300 million since the franchise moved from Winnipeg, Manitoba, in 1996, and at least $36 million each of the last three seasons.

Any bid to keep the team in Arizona would be far less than the $212.5 million Balsillie had offered, contingent on moving the franchise to Hamilton. Last fall, Forbes magazine said the Coyotes were the least valuable franchise in the NHL, at $142 million. That would mean much less for Moyes, who says he has $300 million invested and would have recouped $100 million in the sale to Balsillie.

At Jobing.com Arena in Glendale on June 15, Coyotes president Doug Moss called this a “great day for our fans, for our partners the city of Glendale, and we’re really gratified we can start the next chapter of the Phoenix Coyotes right here in Glendale.”

But Balsillie, who has failed in two other bids to buy NHL teams, refused to concede.
“We look forward to hearing from the NHL soon on its view of our relocation application and an appropriate relocation fee, so as to allow the court to determine if that fee is reasonable,” Walker said Monday. “We still think there is enough time for the NHL to approve Mr. Balsillie’s application and move the team to Hamilton by September.”

Baum shot down the claim by Moyes and Balsillie that failure to allow the team to move would violate antitrust law.

“This court cannot find that antitrust law, as applicable nonbankruptcy law, permits the sale free and clear of the relocation rights of the NHL,” Baum wrote.

An antitrust claim requires a “bona fide dispute,” but there is none because Balsillie only sought the NHL’s permission to relocate the franchise after it was brought up in court, Baum wrote.
Baum also rejected arguments by Moyes and Balsillie that while assuming the contract the Coyotes have with the NHL, they can disregard the portion of the agreement that requires the games be played in Glendale.

The judge compared that claim to “a purchaser of a bankrupt franchise in a remote location asserting that it can be relocated far from its original agreed site to a highly valuable location, for example New York City’s Times Square.”

Baum said that because he was rejecting the motion, he need not rule at this time on whether Moyes and Balsillie could void Glendale’s lease. The city, which had claimed nearly $795 million in damages if the Coyotes had moved, said it was pleased.

“Clearly the court recognized the significance of these issues and the unique interests of the City of Glendale and its taxpayers,” the city said in a statement. “The court based its decision on the law and facts and not on countless rumors and innuendo regarding this matter.”

Associated Press writers Jonathan Cooper and Mark Carlson in Phoenix contributed to this report.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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