August 05, 2009
The NHL and Glendale wanted to delay the ownership auction for the Phoenix Coyotes in order to give the League-approved bidders more time to craft their proposals and arrange a miraculous series of concessions with the city and the team's arena lease.
In the process, they actually allowed Judge Redfield T. Baum to thrust Jim Balsillie back into the mix for the woebegone franchise, continuing his campaign to move it to Canada.
Baum's ruling on Wednesday that the Sept. 10 auction will include bidders who seek to relocate the Coyotes is a huge blow to Glendale, a major headache for the NHL and a new lease on life for Balsillie's bid. From David Shoalts of The Globe & Mail:
If Balsillie's bid is successful on Sept. 10, this will present more problems for the NHL since it rejected Balsillie as a prospective owner last week. The judge noted the NHL, Glendale and the two Glendale bidders all opposed the Balsillie bid for reasons ranging from the lack of time after the sale to accommodate a franchise move to the brushing aside of NHL rules to the economic damage to the city.
But, Judge Baum added in his decision, lawyers for the club's largest creditor, computer tycoon Michael Dell, wanted Balsillie's bid included since it was the only one that offered to settle its $80-million debt in cash and in full. Balsillie's legal strategy has banked on the fact the bankruptcy court's first obligation is to obtain the best possible outcome for the creditors.
Baum has consistently said it's all about the creditors, and the bottom line is that Balsillie's bid has always been the one that would best soothe their debts. There are considerable obstacles still in his way. A victory remains a long-shot; yet here he is, in the mix at the end.
The decision sets up Balsillie not only as a potential auction winner for the franchise, but for an array of legal battles with the NHL whether he wins or loses. There's simply no way he's disappearing without a fight, with the finish line now within his sights. He ignored protocol in his attempt to buy the franchise, and he'll fight the system long after this auction is over.
"We are in receipt of and have reviewed the Court's Order issued earlier tonight. Obviously, there is a lot to be done and possibly decided before September 10. We remain confident that the successful bidder will be one who is committed to continuing to operate the Coyotes in Glendale for the long term. We also remain confident that Mr. Balsillie's bid for the team will never be approved by the Court for a variety of reasons, including that his application for ownership was overwhelmingly rejected by the NHL Board of Governors last week. We look forward to making significant steps toward resolution of this unfortunate situation over the next several weeks."
Again, how much weight will the court give the decision by the Board of Governors not to let Balsillie into their clubhouse vs. the fact that his bid is the best one to ease the franchise's considerable debt?
The Make It Seven campaign's official statement on the Baum ruling, released via Facebook:
"As the only bidder with a firm offer before the bankruptcy court to purchase the Phoenix Coyotes, we obviously agree that Jim Balsillie belongs in the September 10 auction. From the time his bid was launched, Jim Balsillie has said that all he is asking for is a chance to bid for the Coyotes at auction through the bankruptcy court process on a level playing field and let the best bid win. That's fair and transparent. It's the best outcome for creditors and for the future of the franchise. We think Jim Balsillie's bid will emerge the winner because it offers the best financial terms and the most solid hockey market in Hamilton, where there are great fans thirsting for this team and a 32-year lease option at what will be a top-flight NHL arena."
Of course, now that the Sept. auction is open to bidders who would relocate the team, might the NHL encourage the participation from a group that could pay off the creditors and who wouldn't move the Coyotes to a lucrative expansion market like Southern Ontario but to an NHL-approved market for relocation?
Not for nothing, but this sure is a purdy arena for a Western Conference team ...