Monday, May 11, 2009

NHL: Moyes Gave Up Control for Dollars


((HT: TSN))

NHL commissioner Gary Bettman ((pictured, thanks Dave Sandford/Getty)) gave the Phoenix Coyotes and owner Jerry Moyes US$38 million of the league's money to help the team maintain operations and as a result holds an "irrevocable proxy" according to documents filed in an Arizona court, reports the Toronto Star.

The Kevin McGran article is in black...

The League has taken issue with Moyes' attempt to place the franchise into Chapter 11bankruptcy and accept an offer to buy the team from BlackBerry billionaire Jim Balsillie.

According to the Star the NHL argues in the court documents that Moyes does not have the authority to file for bankruptcy.

"As a condition to providing this support, the league required Mr. Moyes . . . to execute proxies in favour of the commissioner of the NHL to control the equity and operation of the (club)."

"Moyes asked that he be allowed to retain his titles to avoid public embarrassment, and the league so agreed, but with the express understanding that he had no authority . . . to take any action outside the normal course of business, including filing for bankruptcy."

According to the Star, Moyes and his legal have countered the NHL's claims in the court documents by saying the NHL was only given voting powers on certain matters and that bankruptcy is not included because it is not a voting matter.

McGran continues:

The NHL maintains it's been in control of the franchise and has until Wednesday to file arguments to further its case beyond its objections it filed last week.

"We're busy preparing our papers for submission on May 13," deputy commissioner Bill Daly told the Star in an email. "Franchises are assigned territories for a reason. No club owner (much less a new purchaser) has an inherent right to pull up stakes and move to a different location that they may deem more desirable. That's not what they bought when entering the league. Decisions on franchise location are left to the discretion of the 30 member clubs acting as a league in accordance with well-established rules and criteria."

The league's argument that it holds that irrevocable proxy is its strongest case. But the Coyotes, who have until Friday to respond to the NHL's case, have already issued a counteroffensive on the proxy.

"The NHL apparently believes that its commissioner controls (the franchise) by virtue of certain voting proxies," reads Moyes' statement as a debtor.

"What the NHL and the commissioner fail to recognize (or simply ignore) is the fact that the voting rights that were granted to the commissioner under the proxies are expressly limited to only matters, if any, that actually require a vote."

And taking the team into bankruptcy is not a matter that requires a vote, says the statement. It is in fact a right guaranteed by the league to Moyes when he bought the team, citing Article 6 of the Hockey Operating Agreement.

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