NHL

Balsillie and Bettman set for showdown in Arizona court

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The Canadian Press
9/9/2009 7:52:41 PM
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PHOENIX -- A faceoff is looming between the two primary figures in the Phoenix Coyotes bankruptcy case.

Canadian billionaire Jim Balsillie and NHL commissioner Gary Bettman are both expected to take the stand in court this week, according to an agenda filed in U.S. Bankruptcy court Wednesday.

The two men are each scheduled to appear for 40 minutes of questioning on Friday -- the second of two days Judge Redfield T. Baum has set aside this week to oversee an auction for the team.

Offers from Balsillie and the NHL are the only two expected to be considered by the court.

Balsillie's company PSE enters with the highest bid, as much as US$242.5 million, contingent on being able to move the Coyotes to Hamilton. He upped his offer over the weekend by extending the city of Glendale the opportunity to take $50 million in exchange for a release from the team's 30-year lease at Jobing.com Arena.

The NHL has offered $140 million and intends to keep the Coyotes in the desert for now.

Ice Edge Holdings, comprised of a group of Canadian and American businessmen, confirmed Wednesday that it would not take part in this week's auction, hinting that it may try to buy the team at a later date. It had put together a bid for $150 million.

The agenda outlines two full days of activity before the court.

On Thursday, the judge will confirm the details of both the Balsillie and NHL bids and determine whether there are any other offers to be considered. Most of the remaining time has been put aside to discuss the issues surrounding relocation -- with a heavy focus on what sort of fee the league could be entitled.

There's already a rift on that front. Studies done for the NHL have put a proposed relocation fee between $101 million and $195 million, while a study for Balsillie by economics professor Andrew Zimbalist pegged the amount at $11.2 million to $12.9 million.

Balsillie's lawyers have put forth a motion to exclude the reports from the NHL's experts -- a suggestion the league took issue with in a court filing late Wednesday.

"The NHL's position has been (and remains) that it is premature to consider relocation issues, including a potential relocation fee," it said. "In any event, PSE offers no legitimate basis to exclude the NHL's expert reports."

Former CFL commissioner Tom Wright will also be present for up to 40 minutes of questioning on Thursday. He prepared Balsillie's application to relocate the team to Hamilton and has submitted expert testimony in support of the move.

The real intrigue should come Friday, when Balsillie and Bettman each take a turn on the stand. The agenda says each man will spend 30 minutes being cross-examined on "good faith purchaser issues" before being allotted 10 minutes for redirect questioning.

The two most notable players in this case have rarely been present for court proceedings since former Coyotes majority owner Jerry Moyes placed the team in Chapter 11 bankruptcy four months ago -- although Balsillie and Bettman both attended a hearing last week, apparently shaking hands during a chance meeting in a washroom.

Even though the case is moving closer to an auction, Baum has yet to rule on some of the most important issues.

At the top of that list is whether the judge should overrule the 26-0 vote by the NHL's board of governors rejecting Balsillie as an owner. The judge also hasn't said if the team can be moved as part of the sale -- a ruling that could be precedent-setting in professional sports.

Baum will award the team to either the NHL or Balsillie sometime after completing this week's auction.

Whatever he decides, it almost certainly won't be the end of the matter. The NHL has promised to appeal and seek a stay if the judge rules for Balsillie. Balsillie, meanwhile, said in a declaration filed Tuesday that he would appeal any adverse ruling.

Meantime, the Ice Edge partnership says it decided to withdraw its bid because after being unable to reach a new lease agreement with Glendale -- the same reason given by a group headed by Chicago sports mogul Jerry Reinsdorf when it pulled out last week.

The Ice Edge group, whose supporters included Coyotes coach Wayne Gretzky, wanted to play five games in Saskatoon.

"We continue to strongly believe in the potential of the Phoenix Coyotes for the long term in Glendale," Ice Edge said, "and therefore we will be examining our options after the conclusion of the bankruptcy auction process."

The NHL says that, if it wins the bid, it plans to resell the team outside of the bankruptcy process, with the first preference to find a buyer to keep the franchise in Arizona. If that isn't possible, the league says it will look to relocate the franchise.

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With files from The Associated Press.

Jim Balsillie  (Photo: The Canadian Press)

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(Photo: The Canadian Press)
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