Dog Days In Glendale...

Following up on the Scott Burnside piece on the creative financing the Phoenix Coyotes ((pictured, thanks Deirdre Hamill/Arizona Republic)) are using to stay, ahem, afloat these days David Shoalts in the Globe and Mail has come across some really disturbing stuff.

Shoalts has some documents that lay out what's left of the team's money- most of which is tied up in something called "SOF Investments LP." SOF is a subsidiary of the MSD Capital hedge fund which is controlled by Michael Dell.

Yes that "Dell..."

The team's collateral covers, according to the article, close to US$80-million toward MSD and SOF. Got all that...?

We're not done...

Remember we talked about the team and the city butting heads over the screwy lease agreement the Coyotes have with the city...? The only way the team can break the lease ((if it were to get to that point)) would be to declare bankruptcy. Then the Dogs could relocate to Kansas City, Hamilton, or any other possible league-approved suitor's home base.

Are you paying attention Jim Balsillie...?
Of course you are... you wouldn't be the shrewd businessman you are if you weren't.

The key paragraphs from the Shoalts piece are at the bottom...

"The Coyotes began borrowing money from SOF in 2003, and increased its collateral in succeeding years, according to documents obtained by The Globe and Mail. According to a Uniform Commercial Code financing statement filed with the state of Delaware, the Coyotes pledged everything from ticket revenue, broadcast revenue, concessions, future NHL expansion payments, player contracts, insurance policies, arena revenue and merchandise sales as collateral.

A series of financing statements were filed over the years as the Coyotes continued their relationship with SOF. On January 17, 2007, another document contained a single sentence: "The collateral consists of all assets of the debtor."

The timing of that document suggests the Coyotes increased their loan from SOF in order to pay off one to another New York hedge fund, Fortress Credit Opportunities LP.

In a statement filed on November 6, 2008, which extended the loan from SOF until Dec. 29, 2013, almost all of the Coyotes' assets were listed as collateral."

What it appears Jerry Moyes has done is mortgage his future to fund his present...
We think the hourglass is running out of desert sand...