PHOENIX -- Phoenix Coyotes owner Jerry Moyes has agreed to sell the bankrupt franchise to the NHL.
The agreement, which still must be approved by Judge Redfield T. Baum, was announced in U.S. Bankruptcy Court on Monday after lawyers met for more than an hour during a recess in a status hearing on the case.
Former coach Wayne Gretzky, who has a US$22.5 million claim in the case, has not agreed to the deal.
Moyes' lawyer says the decision to make a deal came largely because the expenses of running the team in bankruptcy were being paid from the league's $140-million offer. Moyes was left with few options after his attempt to sell the team to Canadian billionaire Jim Balsillie was rejected by the court.
NHL deputy commissioner Bill Daly says that once the deal closes, the league will immediately look to sell the team, preferably to an owner who will keep the club in Arizona.
The league hopes to close on the sale on Nov. 2.
"Obviously, the pieces fell into place," Daly said after the hearing. "The focus now has to shift to getting the club out of bankruptcy and finding a new owner. I'm pleased with the outcome today."
Daly confirmed that NHL officials, including commissioner Gary Bettman, met on Monday with representatives of Ice Edge, a group that has said it plans to keep the team in suburban Glendale. Daly said other potential buyers have also expressed interest, but he didn't identify them.
The agreement between the NHL and Moyes is expected to be submitted to the court as early as Tuesday.
After an NHL lawyer outlined the agreement in court, Baum said he would wait to see a copy before commenting. "I'll read it when I get it," Baum said. "I don't think I can say anything more about that."
The judge set a Friday morning deadline for objections from other creditors, and said he would hear objections on Nov. 2.
The case has generated more than 1,000 pages in court filings and considerable rancour among the parties. But lawyers were ready to make a deal when Baum called a recess during the status hearing on Monday afternoon.
Clutching pens and legal pads, about a dozen lawyers huddled in the centre of the courtroom, then broke into smaller groups to confer.
When the recess ended, NHL lawyer Greg Milmoe kissed Carolyn Johnson, Moyes' lawyer, on both cheeks.
Moyes took the team into Chapter 11 on May 5 with a plan to sell to Balsillie, contingent on moving the franchise to Hamilton, which the NHL vehemently opposed.
Last month, Baum rejected outright Balsillie's offer to buy the team for $242 million and move it to Canada. The judge also turned down the NHL offer but he left the door open for the league to purchase the franchise if it amended its bid to treat Moyes and Gretzky, the ex-coach, more favourably.
Monday's agreement is essentially the same as the NHL's original bid.
"Clearly, from an understanding, it remains unchanged," Daly said.
What did change was Moyes' realization that the amount of money available to him was dwindling with each withdrawal to meet payroll and other expenses. The next withdrawal, about $2.6 million, will come this week.
"That's coming out of our mouths," Johnson said. "That certainly was pressure to settle."
Moyes says he loaned about $100 million to the franchise, but he stands to recover perhaps only a fraction of that amount.
Moyes left the court without speaking to reporters. Asked if Moyes was happy about the deal, Johnson replied, "Nobody's happy about losing that much money."
Lawyers said the offer is worth about $128 million.
The agreement would provide the nearly $80 million that is owed SOF Investment, the largest secured creditor, and the NHL would get the $37 million it is owed for funding the team since last fall.
Between $9 million and $11 million would be available to be divided between Moyes and Gretzky.