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U.S. bankruptcy judge rejects request for Jerry Reinsdorf deposition

PHOENIX - Jerry Reinsdorf and his partners won't be subjected to questioning by attorneys for team owner Jerry Moyes as they work to put together a bid to buy the Phoenix Coyotes in U.S. Bankruptcy Court.

Judge Redfield T. Baum rejected Monday a request by Moyes to have Reinsdorf and several others in the potential ownership group give depositions before the July 24 deadline for submitting their bid.

However, the NHL reached an agreement with Moyes' lawyers to have commissioner Gary Bettman and deputy commissioner Bill Daly give depositions July 22 and 23 in New York.

NHL lawyer Alan Mada said the league preferred to wait until after any bid is submitted but agreed to the earlier questioning "in the spirit of co-operation."

Monday's hearing was conducted to sort out some of the issues that have arisen recently in the complicated case.

Moyes' representatives, as well as the trustee and the creditor's committee, wanted to question Reinsdorf, owner of baseball's Chicago White Sox and the NBA's Chicago Bulls, over concerns he may have colluded with other potential bidders to produce an offer that would have no competition.

The concern stems from a comment by Daly, who said other potential purchasers "coalesced" around the Reinsdorf proposal.

Baum, however, said that he didn't want to subject any potential buyer to depositions and other forms of legal discovery before any formal bid had been submitted. He said he wanted to encourage bidders, not discourage them.

He told the Reinsdorf group's lawyer, however, to be prepared to have two representatives give depositions after any formal bid is submitted.

Reinsdorf - with a group that includes Phoenix lawyer John Kaites and Tony Tavaras - has given the NHL a preliminary offer to buy the team for US$148 million.

The NHL indicated in court filings that another potential buyer has surfaced. The league did not identify him, but Connecticut-based businessman Daryl Jones has acknowledged he is part of a group of Americans and Canadians taking a preliminary look into buying the team and keeping it in Arizona.

The judge has set July 24 as the deadline for submitting bids to buy the team and keep it in Glendale with the sale set for Aug. 5.

If no acceptable purchaser is found, the bidding will be open to prospective buyers who would relocate the franchise. That would reopen the door for Canadian billionaire Jim Balsillie, who has offered $212.5 million to buy the team and move it to Hamilton, Ont.. He still wants to have the team playing in Hamilton in the coming season.

Meanwhile, a lawyer for hockey great Wayne Gretzky told the judge that he hoped to have an agreement with the Glendale over information to be provided to the city. Gretzky is the Coyotes' coach and owns a small share of the team. The city had sought a deposition from Gretzky as well as some tax records.

Glendale representatives and Moyes have agreed to provide each other with some information sought in motions filed in recent days. There are outstanding issues, most notably surrounding information to be provided to Moyes about Reinsdorf's negotiations with the city over a new lease agreement. Baum told the two parties to continue to try to resolve the issue on their own.

The city wants to remove Reinsdorf's claims of $100 million as a debtor, saying the money should instead be considered equity. Glendale also is questioning Gretzky's claim of debt. He would receive $22.5 million in the Balsillie deal.

Moyes took the team into Chapter 11 bankruptcy on May 5, to the surprise of the NHL, with a plan to sell the team to Balsillie. The Canadian contends the team will never make it in Phoenix, where it moved from Winnipeg in 1996.

The NHL wants to keep the team in Arizona and contends the Coyotes could be successful with better management and more success on the ice.

The Coyotes have lost more than $30 million each of the last three seasons and are being funded by the NHL until a new owner is determined.


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