((HT: Arizona Republic/Craig Harris))The Phoenix Coyotes ((pictured, thanks Arizona Republic file)) have filed for Chapter 11 reorganization to implement a court-approved sale of the team under the federal bankruptcy code, the team announced Tuesday.
The filing included a proposed sale of the franchise to PSE Sports & Entertainment, LP, a Delaware limited partnership ("PSE"), which would move the franchise to southern Ontario, Canada.
"Extensive efforts have been undertaken to sell the team, or attract additional investors, who would keep the team in Glendale," said Coyotes' Chief Executive Officer and Managing Member Jerry Moyes.
Creating a process under the supervision of a judge assures that anyone wishing to purchase the team will have the opportunity to bid, Moyes added.
"Likewise, the City of Glendale, which has been very cooperative with efforts to keep the team in Glendale, will be able to provide potential buyers assurances of the City's willingness to offer incentives to keep the team as a tenant in the Jobing.com arena, the lease for which is subject to rejection in bankruptcy," Moyes said. "The process assures that the identities of the new owner and the team's location will be known by June 30, 2009, thus enabling the NHL to include the team in its 2009-10 schedule."
Jim Balsillie has put in an offer on the Phoenix Coyotes.
According to a media release, the Blackberry billionaire's offer of $212.5 million (US) for the team is conditional on the franchise relocating to Southern Ontario.
"The current team ownership asked that I table an offer to purchase the Coyotes and significant discussions resulted in an offer that is in the best interests of the franchise, the NHL, and the great hockey fans of Canada and Southern Ontario," Balsillie said in the release.
"I am excited to move closer to bringing an NHL franchise to what I believe is one of the best un-served hockey markets in the world, Southern Ontario. A market with devoted hockey fans, a rich hockey history, a growing and diversified economy and a population of more than 7 million people," he said.
The release also says, Balsillie agreed to post debtor-in-possession financing of $17 million (US) at the request of the Coyotes franchise. The money will keep the franchise going before the sale is completed.
Those of us at OSG HQ think this is one of those "about-damn-time" moves for the NHL. Balsillie has long proven himself to be a man who knows good business. Let's just hope this is the first move of many to cities that can respect the NHL product for what it is.
Are you listening Atlanta...?
Tuesday PM UPDATE:
Harris adds in a later version of the article:
"At the end of the day, you have a team that was not making money. It has not made money since it has been here, and he (Moyes) received an offer," said Thomas Salerno, the bankruptcy attorney for the Coyotes. "We feel it (offer) maximizes the value of the team for the assets and in such a way that sets up a process where other people can bid."
PSE's price of $212.5 million provides funds to pay secured creditors in full. Approximately $80 million would go to SOF Investments LP and $35 million to the NHL, which had loaned the team money earlier this year.
That would leave $97.5 million to unsecured creditors. Coyotes owners would receive nothing for their equity investment, including $206.5 million in preferred and common equity that will not be recovered by Moyes under the current offer.
Moyes said, "Creating a process under the supervision of a judge assures that anyone wishing to purchase the team will have the opportunity to bid."
The National Hockey League, meanwhile, said it has removed Moyes as the team owner.
"We have just become aware of today's bankruptcy court filing purportedly made on behalf of the Phoenix Coyotes. We are investigating the circumstances surrounding the petition, including the propriety of its filing,” the league said in a statement Tuesday night.
“We have removed Jerry Moyes from all positions of authority to act for or on behalf of the club. The league will appear and proceed before the bankruptcy court in the best interests of all of the club's constituencies, including its fans in Arizona and the league's 29 other member clubs.”
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