Coyotes Auction Open To Everyone

((HT: Arizona Republic/Watters))

The September auction of the Phoenix Coyotes will be open to any and all bidders, according to a U.S. Bankruptcy Court decision Wednesday afternoon.

Judge Redfield T. Baum spent a couple of days deliberating whether the auction would be limited to bidders who would keep the NHL team in Glendale or expanded to those such as Canadian business mogul Jim Balsillie ((pictured, thanks Reuters file)), who wants to relocate the hockey franchise.

"Recognizing that this decision probably expands the issues for the auction," Baum set a further hearing for 1:30 p.m. next Tuesday.

GlobeSports David Shoalts continues:

Judge Redfield T. Baum of the U.S. Bankruptcy Court overruled the NHL on Wednesday to keep Jim Balsillie’s bid for the Phoenix Coyotes alive.

The judge ordered that Balsillie’s $212.5-million (all currency U.S.) offer for the Coyotes must be included in a Sept. 10 auction for the team. The NHL is against Balsillie because his bid is conditional on moving the team to Hamilton.

Balsillie’s bid will now be considered along with two bids that pledge to keep the Coyotes in suburban Glendale. However, the bids from Chicago White Sox and Chicago Bulls owner Jerry Reinsdorf and a group of Canadian and American businessmen known as Ice Edge Holdings LLC, are conditional on negotiating a new arena lease with the City of Glendale and new terms with the team’s creditors, and have not been officially filed with the court.

If Balsillie’s bid is successful it will present more problems for the NHL, whose governors rejected Balsillie as a prospective owner last week.

“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 Sept. 10 auction,” Balsillie’s spokesman Bill Walker said following the ruling. “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.”

In his decision, Judge Baum recognized this will raise a lot of legal issues. He called for a hearing on Aug. 11 to hear arguments from lawyers from all sides – Coyotes owner Jerry Moyes, the NHL, Glendale, Balsillie and the creditors – about the ramifications of allowing a bid from someone who was rejected by the league.

Earlier in the day, Judge Baum postponed a hearing to find if Moyes and his lawyers would be found in contempt of court. Lawyers for the City of Glendale demanded that Moyes and his lawyers be found in contempt for revealing information about arena-lease negotiations with Reinsdorf that were subject to a confidentiality agreement. Moyes’ lawyers said it was an “inadvertent” mistake. No reason was given for the postponement.

NHL deputy commissioner Bill Daly could not be immediately reached for comment.

Balsillie Will Continue Coyotes Bid

((HT: GlobeSports/Shoalts, Waldie))

The level of hostility from the NHL’s board of governors caught Jim Balsillie ((pictured, thanks GlobeSports file)) by surprise, but the rejection of his bid for the Phoenix Coyotes did not.

Even though the NHL announced yesterday that its governors unanimously rejected Mr. Balsillie as a potential owner and approved a bid for the Coyotes from Chicago White Sox and Chicago Bulls owner Jerry Reinsdorf, the co-CEO of Research In Motion Ltd. vowed to press on.

Balsillie’s spokesman, Bill Walker, said a new version of his $212.5-million (all currency U.S.) offer for the team will be filed with the U.S. Bankruptcy Court in a few days.

“We’re moving full steam ahead,” Walker said. “We don’t believe that Jim Balsillie’s qualification to be an NHL owner is an issue at all.”

The committee gave a welcome reception to a proposal by Ice Edge Holdings, a group made up of Canadian and American investors.

“We didn’t hear anything that would stop us,” said Daryl Jones, a partner in Ice Edge. “We’re still in the game.”

Like Reinsdorf, Ice Edge wants to keep the Coyotes in the Phoenix suburb of Glendale, but it has not submitted its bid to the court – which will hold the first of two possible auctions for the team on Aug. 5 – because it has yet to line up all of its financing and arrange a new arena lease. The governors deferred a decision on the offer, and now the group says it plans to press ahead with a bid.

NHL deputy commissioner Bill Daly said in an e-mail message that Mr. Balsillie was rejected under bylaw 35 of the league’s constitution. That section says the league can reject potential owners if it does not believe they are of “good character and integrity,” as well as for financial reasons. Daly declined to comment when asked to be more specific.

Walker declined to comment on details of the meeting with the governors’ executive committee or on why the league rejected Balsillie.

A source familiar with the meeting said NHL commissioner Gary Bettman called Balsillie shortly after the gathering to tell him why the league was rejecting him as an owner. According to the source, Bettman cited the way Balsillie “had interacted with other member clubs.”

The meeting, held in a Chicago airport hotel, was tense. For more than an hour, members of the executive committee took turns verbally pounding Balsillie. According to sources familiar with the proceedings, Montreal Canadiens owner George Gillett and Minnesota Wild owner Craig Leipold led the charge.

Gillett was embarrassed last November when Balsillie told a reporter the Canadiens were for sale. It was denied at the time but later proved to be true. Leipold was the owner of the Predators in 2007 when Balsillie’s bid for the team was first accepted and then rejected.

The source said Gillett claimed the fallout from Balsillie’s comments on the impending sale destroyed the Canadiens’ season.

“It was not gentle,” the source said.

However, the NHL’s rejection of Balsillie as an owner may not stand up in bankruptcy court.

During a hearing in June, Judge Redfield T. Baum told the NHL that because it approved him as an owner when he tried to buy the Pittsburgh Penguins in 2006, it could only reject Balsillie as an owner if there was a “material change” in PSE Sports & Entertainment, the company Balsillie formed to handle the Penguins and Coyotes bids.

“We do not think that Jim Balsillie’s qualification to be an NHL owner is an issue in this case, given his 2006 approval as an NHL owner,” Walker said.

“Presumably the onus will be on the NHL to demonstrate a material change in PSE’s circumstances, although no such change was raised with us,” he said. “Beyond that, we have confidence in, and respect for, Judge Baum and the legal process as this case unfolds.”

Daly responded by denying Balsillie had been approved as an owner in 2006 and refuting Walker's comments.

"Mr. Walker must have been at a different meeting than the rest of the Executive Committee," Daly said via email Wednesday night. "Beyond the fact that Mr. Balsillie was never approved by the Board of Governors in 2006, his entire interview today was spent answering questions on the things he has done since 2006 that call into question his bona fides to be an NHL owner. Obviously, the board was not comfortable with approving him as a business partner, as is their absolute perogative."

Sources say the Balsillie camp believes the NHL wanted to reject him as an owner in advance of the Aug. 5 auction sale of the Coyotes, which is restricted to bidders willing to keep the team in Glendale. If Judge Baum declines to accept the bid from Reinsdorf, who is the only person to file one so far, then an auction for bidders like Balsillie, who wants to move the Coyotes to Hamilton, will be held on Sept. 10.

Balsillie is hoping Judge Baum will accept his bid because it offers $64.5-million more than Reinsdorf’s bid. The Reinsdorf bid is for $148-million and is largely based on the assumption of debt. It is also conditional on working out a new lease and revenue concessions from the City of Glendale, plus concessions from the major creditors.

Walker said by almost any measure Balsillie’s offer is far better than Reinsdorf’s. For example, he said, Balsillie has arranged a 32-year lease for the Copps Coliseum in Hamilton, whereas Reinsdorf has yet to reach agreement with Glendale for Jobing.com Arena.

The Ice Edge group has only submitted a letter of intent so far, offering up to $150-million, and it still has to pull together a final offer. The NHL committee spent most of the meeting asking the group, which wants to have the Coyotes play five regular-season games in Saskatoon, about its background and financial assumptions.

Balsillie Looking Forward To Partnership With NHL

((HT: TSN))

During his state of the union prior to the Stanley Cup final, NHL commissioner Gary Bettman explained that the situation with the Phoenix Coyotes was not about personal issues and was instead about following the rules as put forward by the National Hockey League.

"From my standpoint, it's not personal," said Bettman on Saturday. "It's about league rules and it's about doing the right thing in terms of the stability of this game and this league."

Balsillie spokesman Bill Walker says the BlackBerry billionaire is not trying to circumvent the NHL's rules.

"We look forward to submitting our application for relocation," said Balsillie spokesman Bill Walker. "Jim Balsillie has always set out to meet NHL rules and regulations in seeking a franchise and he looks forward to working in partnership with the league and Board of Governors as a potential owner.

"NHL bylaws lay out a three-part criteria that needs to be met: owner, market and arena. We think this bid exceeds all three criteria with a proven business leader as owner, the best unserved hockey market in North American and a state-of-the-art arena renovation. It adds up to an NHL franchise poised to succeed for many years to come," added Walker.

Balsillie is expected to officially file an application for relocation with the NHL on Monday.

The NHL, Coyotes majority owner Jerry Moyes and Balsillie are currently involved in bankruptcy court proceedings in Arizona to determine the future of the franchise.

Balsillie has made an offer to purchase the club as long as he can move the team to Hamilton, Ontario.