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Balsillie: Coyotes still bankrupt, no matter who owns them

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The Canadian Press
5/14/2009 7:34:48 PM
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TORONTO -- Jim Balsillie has fired back at the NHL and its claim that his attempt to buy the Phoenix Coyotes is a "sham."

The Canadian billionaire says whatever the league's legal arguments are over who actually controls the team right now -- as far as he's concerned, the Coyotes remain bankrupt.

"Who owns or controls the team is a distinction without a difference," Balsillie said in a statement Thursday. "The team itself is still bankrupt, voluntarily or not. The owner of the team has a fiduciary obligation towards the creditors."

On Wednesday night, the NHL filed motions in an Arizona bankruptcy court claiming that Balsillie's attempt to purchase the Coyotes out of Chapter 11 bankruptcy and move the team to southern Ontario is a "sham."

The NHL claims that Coyotes majority owner Jerry Moyes gave up the right to place the team into bankruptcy when he received financing from the league last year. The league also contends that Moyes has no right to complete a sale conditional on a move to southern Ontario because that territory belongs to the league.

"Any bid for the sale of the Phoenix Coyotes solely for relocation to Ontario is a sham and should be rejected by this court," the league said in a motion.

Moyes told NHL officials that he was "broke" and "done" funding the team last October, the league said in the filing.

One month after that meeting, Moyes told commissioner Gary Bettman and other officials "that he was no longer willing or able to fund the club," according to the filing.

Those admissions, the league argues, triggered an agreement that allowed the NHL to take over the financially troubled hockey club.

"I understand that Moyes was fully aware that he was giving up and ceding to the commissioner control of the equity and operations, including as managing member, of the club and arena management," NHL deputy commissioner Bill Daly said in the filing.

League officials "have effectively made all ownership and management decisions for the club since November 2008," according to the filing.

Those decisions included the removal of Coyotes chairman and CEO Jeff Shumway on Jan. 23. At the time, Moyes announced Shumway's departure in a statement, saying, "Jeff has done a great job in managing the team for me but right now I need him to focus on some of my other projects."

Among the other claims the NHL makes in court documents are that Moyes has not complied with all of the rules and procedures he agreed to when he purchased the Coyotes and that there isn't enough time for the franchise to be moved before next season.

The parties will be in a Phoenix courtroom for a bankruptcy hearing next Tuesday.

Balsillie, the co-CEO of Research in Motion, has offered US$212.5 million to purchase the Coyotes. On Thursday, he said that his offer -- which is conditional on moving the team to southern Ontario -- goes the furthest in "satisfying creditors' claims."

He has twice tried and failed to buy an NHL team (Pittsburgh and Nashville) and move it to southern Ontario. Balsillie reiterated Thursday why he remains motivated to try again.

"At the end of the day, this is about the passion Canadians feel for the game of hockey and a chance to provide those fans with the opportunity to support a seventh NHL team," said Balsillie. "That's what this is all about, great hockey fans in a great hockey market."

Jim Balsillie (Photo: )

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