August 03, 2009
Why the "Night Court" image? Because things are getting a tad over the top in the Phoenix Coyotes ownership squabble.
The bitter Jerry Moyes, who sunk millions into the franchise and saw his attempt to push through a sale to Jim Balsillie thwarted by the NHL and the courts, is accused of leaking information about Jerry Reinsdorf's bid for the Coyotes and sending the Chicago sports icon's camp into hysterics.
Oh, and about that Balsillie fellow: Some of the news out of the courtroom today is pretty positive for his fledgling bid, if it still has a shot after getting shut down by the Board of Governors.
What a mess. If Dan Fielding had been representing either side, this thing would have been settled ages ago. And it also would have included plenty of double entendres, which is always a good thing.
The leaked confidential filings say Reinsdorf has asked for a special taxing district to be created in the district that would provide as much as $23 million next fiscal year through a "voluntary" surcharge on retail sales.
Additionally, if the team were still losing money after five years, Glendale would have to pay Reinsdorf $15 million for each year of losses or allow the team to be sold and relocated, according to Moyes' filing. There was no indication that Glendale officials had agreed to any of these conditions, nor has a City Council meeting to approve such a deal been scheduled.
You can understand how a bidder for a team on the verge of relocation might be embarrassed by the public disclosure of an out clause for the franchise in five years.
Plus, conservative watchdog groups have been putting heat on the city for weeks regarding taxpayer dollars and the Coyotes; one assumes they'd like to know more about this "voluntary surcharge" on retail sales.
The other news today is that the auction for the Coyotes has been delayed until Sept. 10 to give the two ownership groups approved by the NHL -- Reinsdorf and Ice Edge, which received a strong "maybe" from the League for its proposed Phoenix/Canada split for the Coyotes -- more time to negotiate with the city and creditors.
That's the same day the "relocation auction" for the team was initially scheduled, and David Shoalts from the Globe & Mail reports that Judge Redfield Baum will rule on that second auction this week, and could combine the two for Sept. 10. From the Globe & Mail, even with his candidacy for ownership rejected by the NHL, Balsillie's still in the mix:
Despite the uncertainty, Balsillie, whose ownership application was rejected by the NHL last week, remains in the picture. Indeed, at one point in the hearing Judge Baum described Balsillie's $212.5-million cash bid (all currency U.S.) as the biggest and best of the three bids. Balsillie's bid is conditional on moving the Coyotes to Hamilton.
Both the Reinsdorf and Ice Edge bids involve relatively little cash for the creditors and are conditional on negotiating new deals with the team's creditors and a new arena lease with Glendale.
Balsillie received another boost yesterday when a lawyer for the Coyotes' largest creditor said it was only interested in being paid in full and in cash. A lawyer for SOF Investments, a fund owned by computer tycoon Michael Dell, told Judge Baum that only Balsillie's bid would do that, although the fund had issues with all three bids. Lawyers for SOF reserved the right to agree to any of the bids if negotiations with either Reindsorf or Ice Edge produced an acceptable result.
You know what's going to be a blast? The humungous number of lawsuits filed no matter who wins the right to own a team that can't make money in the first place.
Finally, if you're into the behind-the-scenes intrigue of this case, Sarah Fenske of the Phoenix New Times has a startling, lengthy piece that explores just how far back Reinsdorf's interest in this team goes and how far the city manager appears willing to go to hand the Coyotes to Reinsdorf and lobbyist John Kaites. Based on the info in the article, there are a ton of questions that need answered about favoritism and business relationships with these bidders.
Check out Five For Howling tweeting from the courtroom for more.