NHL files bid in Bankruptcy court to purchase Coyotes

The Canadian Press
8/25/2009 6:59:23 PM
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PHOENIX -- The NHL has filed a bid in U.S. Bankruptcy Court to purchase the Phoenix Coyotes and keep the team in Arizona.

Deputy NHL commissioner Bill Daly said in a news release Tuesday that the league took the action "to maximize the likelihood that the club ultimately will be sold to an acceptable purchaser who is committed to operating the franchise in Glendale."

The release did not say how much the league was offering to buy the team, which is scheduled to be sold at auction on Sept. 10.

Daly said that if the bid is successful, the league intends to sell the team to a third party outside of the bankruptcy process.

"We believe this step is necessary at this time in order to best preserve and maximize the value of the club asset for the benefit of the club's creditors and for the community of Glendale," Daly said.

The move marks a significant shift in the NHL's tactics. The league had backed a planned bid by a group headed by Jerry Reinsdorf, owner of baseball's Chicago White Sox and the NBA's Chicago Bulls. Another group of investors, under the name Ice Edge, was considering making a bid.

Daly said the NHL would "remain supportive of the other efforts that have been made and are being made to purchase and operate the Coyotes in Glendale."

Any offer to keep the team in Arizona is expected to be far less than the US$212.5 million Canadian billionaire Jim Balsillie has offered, contingent on immediately moving the franchise to Hamilton.

"The bankruptcy petition and subsequent events have been incredibly damaging to the club's business," Daly said, "and the sooner the club can be extricated from the bankruptcy process, the sooner club personnel can begin to restore the team's vitality and local fan base."

The NHL's announcement came as another flood of documents were filed in the case, including one by Balsillie challenging the league's stand that it would be impossible to move the team for the coming season.

On Monday, Balsillie filed an amended purchase agreement that included a provision allowing him to walk away from the sale if the contentious issues in the case aren't resolved in his favour by Sept. 14.

Balsillie, the co-CEO of Research in Motion, the company that makes the Blackberry, wants Judge Redfield T. Baum to overturn the NHL board of governors' 26-0 vote rejecting him as Coyotes owner. He also wants the court to determine a relocation fee if the NHL refuses to do so.

A hearing on those issues and others is set for Sept. 2.

The NHL and Balsillie have been locked in a bitter court fight since Coyotes owner Jerry Moyes took the team into Chapter 11 bankruptcy, to the surprise of the league, on May 5, with the plan to sell the team to Balsillie.

The NHL and city of Glendale contend the move was done in a "scheme" to sidestep the normal league rules for transfer of ownership and relocation of a franchise. Balsillie has failed in previous efforts to buy the Pittsburgh Penguins and Nashville Predators.

Gary Bettman (Photo: Harry How/Getty Images)


(Photo: Harry How/Getty Images)
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