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League, Balsillie amend offers for Phoenix Coyotes at bankruptcy auction

The Hockey News

The Hockey News

PHOENIX - The fate of the beleaguered Phoenix Coyotes is now in the hands of one man.

After presiding over four months of hearings, reading more than 950 documents filed with the court and overseeing an auction for the money-losing NHL franchise, Judge Redfield T. Baum must now determine what comes next for the Coyotes.

As the final two days of hearings wrapped up Friday, the self-described sports fan didn't tip his hand about when a decision might come. That seemed perfectly acceptable to both BlackBerry boss Jim Balsillie and the NHL - two sides that strengthened their bids before Baum banged his gavel one final time and started mulling things over.

"The judge said he's going to take as long as he needs," NHL commissioner Gary Bettman said on the courthouse steps. "I respect and commend that decision."

One of the reasons Baum offered for not making an immediate decision was the need to write a clear ruling that will be easily understood by another court. No matter what he ends up deciding, the judge expects this case to be appealed.

The road out of Phoenix probably has a few more twists and turns.

In the meantime, the hockey franchise remains in limbo as it prepares to open training camp at Arena on Saturday morning. One lawyer raised doubt in court whether Wayne Gretzky is still the coach of the team, but Bettman and Coyotes president Doug Moss both indicated afterwards that he'll be present at camp.

The Coyotes open exhibition play Tuesday with split squads hosting the Kings and playing in Los Angeles . Phoenix drops the puck on its regular season Oct. 3 in Los Angeles with the home opener set for Oct. 10 against Columbus.

Meanwhile, hockey fans back in Southern Ontario wait to see if Hamilton will ever host NHL hockey.

When the auction wrapped up early Friday evening, an overall sense of satisfaction and relief was evident among the key players in the case. A notable exception was former Coyotes majority owner Jerry Moyes, who sunk roughly US$300 million into the franchise and sounded off on the league after leaving the court.

"I feel pretty poorly over it to be right honest with you," said Moyes, who favoured Balsillie's bid. "I just don't think I've been treated right. I gave it the 100 per cent try. I feel betrayed by the NHL."

His disappointment is understandable given how little money he stands to receive no matter who ends up getting awarded the team.

Both sides sweetened some aspects of their offers during the final hours of Friday's hearing.

The Balsillie camp amended its US$242.5-million bid to guarantee that the city of Glendale, the Phoenix suburb where the Coyotes play, would receive US$50 million free of any conditions. In his earlier bid, that amount could have been as low as $40 million. Balsillie also removed his Sept. 21 deadline for completion of the sale.

The NHL, meanwhile, kept its bid at US$140 million but agreed that Moyes and Gretzky, who is also the team's managing partner, should come away with some US$14 million between them. Moyes would get the lion's share of that.

On the final day of hearings, Balsillie took some personal shots from NHL lawyer Tony Clark - who suggested the co-CEO of Research in Motion might one day be "rehabilitated" enough to be fit for team ownership - but walked out of the courtroom with a big smile on his face.

"The goal is a very clear one, it's the same as I said the very first day and that is I want to bring a team to Southern Ontario," said Balsillie. "That is my lifelong dream. We need a fair shot and a level playing field - and I got that today and that was really my only objective.

"I couldn't be more pleased."

Balsillie wants the judge to overrule the NHL board of governors' 26-0 rejection of him as an owner - the league deemed him untrustworthy. He also wants Baum to allow the team to be relocated without the league's approval and to set a fee to be paid for that relocation.

NHL lawyers argued that Balsillie's refusal to go through the proper league channels for getting a franchise led to him being rejected. All sales of NHL clubs need to be approved by the board of governors and owners are expected to apply to the league in order to relocate a team.

If Balsillie "wants to understand why he has been rebuffed in his sincere and indisputably passionate desire to be a team owner, what he needs to do is he needs to look in the mirror," Clark said. "He brought this about on himself by his refusal to abide by the rules."

Rebuffed by a league that didn't want to admit him to its club, Balsillie took his fight to the people with a website and corporate sponsors. His entrepreneurial approach won over hockey fans in Ontario but soured the league even more.

While it's nearly impossible to project which way the poker-faced judge might be leaning, most of the interested parties sided with the NHL. The largest unsecured creditor (SOF investments), city of Glendale and the committee of unsecured creditors all spoke up in favour of the league's bid.

Moyes was the lone party to back Balsillie.

The judge again floated the idea that he might reject both bids, noting that a potential purchaser must satisfy several legal requirements.

"If you don't both get there, it's going to be hard to approve it," he said.

Clark, the NHL lawyer, informed Baum that the league would seek a ruling allowing it to take control of the team if both bids were tossed - an indication that it wouldn't mind a "no sale" determination. Balsillie lawyer Jeff Kessler, on the other hand, likened such a ruling to "letting the patient die."

Bettman was put on the stand for 50 minutes worth of questioning Friday, but it didn't produce much drama. The former lawyer exuded confidence and calm while answering questions that mostly centred around the league's decision to join the bidding process.

The NHL waived its opportunity to cross-examine Balsillie, who failed in previous attempts to buy the Pittsburgh Penguins and Nashville Predators. So the Canadian billionaire was unable to make his case personally.

He still appears to be facing an uphill battle. Early in the second day of hearings, the judge noted that the ruling Balsillie wants would be unprecedented.

"Doesn't it strike you as unusual," he asked Balsillie lawyer Susan Freeman, "that in the bankruptcy code of 1978, 31 years later, nobody's ever crossed this bridge before and approved this kind of relocation?"

Now Baum is left to decide whether he'll be the first.

Everyone else seemed determined to get back to day-to-day business - with the league hoping that focus shifts away from everything that played out in this Phoenix courtroom.

"On a lighter note, (training) camps open tomorrow so maybe we can start paying a little bit of attention to what goes on on the ice," said Bettman.

After a long summer spent dealing with innumerable issues surrounding the Coyotes, the commissioner feels like the season has snuck up on him.

"In some respects, it's hard for me to believe it's September because I'm not sure where the summer went," said Bettman. "But it's not about me and that's OK. We did everything we felt we had to do."



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