GotGibson?
Bench Warmer
A bankruptcy judge has rejected both bids to buy the Phoenix Coyotes.
Judge Redfield T. Baum turned down the offers of Canadian billionaire Jim Balsillie and the NHL in a 31-page ruling on Wednesday.
However, he left the door open for the NHL to buy the team if it amends its offer to treat Coyotes owner Jerry Moyes and Wayne Gretzky more fairly.
"In hockey parlance, the court is passing the puck to the NHL who can decide to take another shot at the sale net or it can pass off the puck," Baum wrote.
NHL deputy commissioner Bill Daly issued a statement saying the league is "pleased that the bankruptcy court has confirmed the league's rights to select its owners and the location of its franchises."
"We are reviewing the opinion and considering how we can best address the court's concerns regarding our offer to purchase the Coyotes," Daly said. "It remains our goal to secure the long-term stability of the Coyotes in Glendale."
The ruling comes on the eve of the start of the NHL season and after nearly five months of bitter legal wrangling with Balsillie and Moyes on one side and the NHL and the city of Glendale, where the team plays, on the other.
Moyes took the team into Chapter 11 on May 5 with a plan to sell to Balsillie, contingent on moving the franchise to Hamilton, Ontario, over the NHL's vehement objections.
Balsillie's bid, which rose to $242 million when $50 million was added in an effort to persuade Glendale to drop its opposition, was denied outright by the judge, who said the NHL had the legal right to determine who owns its member teams and where they play.
"This conclusion effectively is the end for the efforts of PSE, Balsillie, Moyes and the Coyotes to force a sale and relocation of the hockey team. ...," Baum wrote.
PSE is the company formed by Balsillie to pursue the Coyotes. The Canadian, co-CEO of Research In Motion, contended that the NHL was an illegal cartel and that its rules were anticompetitive under antitrust law.
Balsillie, who listed his personal worth at $3 billion, has said his bid obviously was the best and that a team would thrive in hockey-crazy Hamilton, while it could never succeed in Glendale.
The NHL board of governors voted 26-0 against Balsillie, labeling him untrustworthy. It is the third time Balsillie has tried and failed to buy an NHL team. Previous efforts to purchase the Pittsburgh Penguins and Nashville Predators also fell through.
At the last minute when other potential bids fell through, the league offered $140 million to buy the team and try to resell it. Its first option was to resell the franchise to a purchaser to keep the team in Arizona. Failing that, the NHL said it would look to relocate the franchise.
"There are multiple factors that support the NHL's bid," the judge wrote.
However, he based his rejection of the league bid on that fact that it would pay all unsecured creditors in full except Moyes and Gretzky, who would get only a share of what was left after every other party got its money.
"One of the prime policies of bankruptcy is equality of distribution among creditors," Baum wrote.
Moyes says he loaned about $100 million to the franchise, while Gretzky has a $22.5 million claim.
"There has been no determination that the Moyes and Gretzky claims are not 'legitimate creditors," Baum said. "It would be inherently unjust for this court to deprive them of their possible rightful share of any proceeds without first providing all involved a fair trial on their claims."
Just what happens next is uncertain in a complex case where more than 1,000 documents have been filed. The league has funded the franchise since last fall and the Coyotes open their season Saturday at Los Angeles.
Gretzky announced his resignation as coach last Thursday.
The unsecured creditors committee and the largest secured creditor, SOF Investment, backed the NHL bid.
The franchise has never turned a profit since moving from Winnipeg in 1996. Baum listed the results of the audit of the franchise that concluded the Coyotes had an operating loss of $54.8 million and a total loss of $72.1 million in 2008.
Baum also commented on the mountain of documents filed in the case:
"The attorneys for the parties have inundated the court with multiple motions, massive briefs and legal memorandums, numerous expert opinions on antitrust and other esoteric issues, conflicting declarations on issues tangentially related to the bankruptcy sale and the assertion of many satellite issues."
Then he zeroed in on the specific reasons for denying both bids.
Judge Redfield T. Baum turned down the offers of Canadian billionaire Jim Balsillie and the NHL in a 31-page ruling on Wednesday.
However, he left the door open for the NHL to buy the team if it amends its offer to treat Coyotes owner Jerry Moyes and Wayne Gretzky more fairly.
"In hockey parlance, the court is passing the puck to the NHL who can decide to take another shot at the sale net or it can pass off the puck," Baum wrote.
NHL deputy commissioner Bill Daly issued a statement saying the league is "pleased that the bankruptcy court has confirmed the league's rights to select its owners and the location of its franchises."
"We are reviewing the opinion and considering how we can best address the court's concerns regarding our offer to purchase the Coyotes," Daly said. "It remains our goal to secure the long-term stability of the Coyotes in Glendale."
The ruling comes on the eve of the start of the NHL season and after nearly five months of bitter legal wrangling with Balsillie and Moyes on one side and the NHL and the city of Glendale, where the team plays, on the other.
Moyes took the team into Chapter 11 on May 5 with a plan to sell to Balsillie, contingent on moving the franchise to Hamilton, Ontario, over the NHL's vehement objections.
Balsillie's bid, which rose to $242 million when $50 million was added in an effort to persuade Glendale to drop its opposition, was denied outright by the judge, who said the NHL had the legal right to determine who owns its member teams and where they play.
"This conclusion effectively is the end for the efforts of PSE, Balsillie, Moyes and the Coyotes to force a sale and relocation of the hockey team. ...," Baum wrote.
PSE is the company formed by Balsillie to pursue the Coyotes. The Canadian, co-CEO of Research In Motion, contended that the NHL was an illegal cartel and that its rules were anticompetitive under antitrust law.
Balsillie, who listed his personal worth at $3 billion, has said his bid obviously was the best and that a team would thrive in hockey-crazy Hamilton, while it could never succeed in Glendale.
The NHL board of governors voted 26-0 against Balsillie, labeling him untrustworthy. It is the third time Balsillie has tried and failed to buy an NHL team. Previous efforts to purchase the Pittsburgh Penguins and Nashville Predators also fell through.
At the last minute when other potential bids fell through, the league offered $140 million to buy the team and try to resell it. Its first option was to resell the franchise to a purchaser to keep the team in Arizona. Failing that, the NHL said it would look to relocate the franchise.
"There are multiple factors that support the NHL's bid," the judge wrote.
However, he based his rejection of the league bid on that fact that it would pay all unsecured creditors in full except Moyes and Gretzky, who would get only a share of what was left after every other party got its money.
"One of the prime policies of bankruptcy is equality of distribution among creditors," Baum wrote.
Moyes says he loaned about $100 million to the franchise, while Gretzky has a $22.5 million claim.
"There has been no determination that the Moyes and Gretzky claims are not 'legitimate creditors," Baum said. "It would be inherently unjust for this court to deprive them of their possible rightful share of any proceeds without first providing all involved a fair trial on their claims."
Just what happens next is uncertain in a complex case where more than 1,000 documents have been filed. The league has funded the franchise since last fall and the Coyotes open their season Saturday at Los Angeles.
Gretzky announced his resignation as coach last Thursday.
The unsecured creditors committee and the largest secured creditor, SOF Investment, backed the NHL bid.
The franchise has never turned a profit since moving from Winnipeg in 1996. Baum listed the results of the audit of the franchise that concluded the Coyotes had an operating loss of $54.8 million and a total loss of $72.1 million in 2008.
Baum also commented on the mountain of documents filed in the case:
"The attorneys for the parties have inundated the court with multiple motions, massive briefs and legal memorandums, numerous expert opinions on antitrust and other esoteric issues, conflicting declarations on issues tangentially related to the bankruptcy sale and the assertion of many satellite issues."
Then he zeroed in on the specific reasons for denying both bids.
