Canadian billionaire Jim Balsillie has put together a revised proposal to purchase the bankrupt Phoenix Coyotes.
Balsillie filed a document in U.S. bankruptcy court on Monday, agreeing to buy the franchise for $212.5 million US and immediately move it to Hamilton, Ont., regardless of the NHL's opposition to such a decision.
The document also says Balsillie wants the ability to walk away from the purchase if the numerous issues of the case are not ruled in his favour by Sept. 14 — four days after an auction for the club is scheduled.
The deadline is also one day before the Coyotes are set to play their first pre-season game.
Balsillie, co-chief executive officer of Research In Motion Ltd., based in Waterloo, Ont., wants his application ruled valid by Judge Redfield T. Baum despite the NHL board of governors' unanimous 26-0 vote against his bid to buy the Coyotes.
The NHL says it is impossible to move the team for the coming season.
The league wants a new owner who would keep the team in the Phoenix suburb of Glendale, where it has lost more than $30 million each of the last three seasons. The NHL contends that with better management and an improved product on the ice, the Coyotes can be successful.
The league is funding the team while the bitter ownership battle goes on.
Jerry Reinsdorf, owner of baseball's Chicago White Sox and the NBA's Chicago Bulls, heads a group that plans to offer $148 million to buy the team and keep it in Glendale. Another group of Canadian and American investors, under the name Ice Edge, is investigating making a bid that also would keep the team in Glendale.
The two groups have been negotiating a new lease agreement with the city of Glendale that would have to be approved by city council.
A mountain of legal documents has been filed since Coyotes owner Jerry Moyes surprised the league by taking the team into Chapter 11 bankruptcy on May 5 with a plan to sell the franchise to Balsillie.
Balsillie's proposed purchase agreement requires either NHL approval of the sale or a court order superseding the owners' rejection of him. It also requires the league to come up with a relocation fee. If the NHL doesn't, Balsillie says the court should determine a "reasonable and appropriate" figure.
The league says relocation is moot because Balsillie has been rejected as an owner.
A Sept. 2 hearing is scheduled to, among other things, hear arguments on the validity of Balsillie's bid.
Balsillie's proposal would allow him to withdraw if the sale has "been stayed or postponed or prohibited in effect in whole or part by any court or governmental body."
The NHL has said it would immediately appeal any ruling that overturns the board's rejection of Balsillie as an owner.
Meanwhile, Balsillie also faces stern opposition from the city of Glendale, which contends the team cannot get out of its lease without paying a $794 million penalty. Balsillie and Moyes say bankruptcy law caps the amount Glendale could receive at a relatively low figure.
The city filed a 32-page document on Monday night outlining why it believes the lease should stand. Glendale echoes the NHL's position that the bankruptcy filing was a ruse.
"After many months of planning," the city argued, "Mr. Moyes bought into a scheme hatched by James Balsillie and Richard Rodier to buy an NHL team through an admitted 'side door."'
The city says proof of the "scheme" is in documents filed under seal.
"When brought to the light of day," the city's argument read, "those facts will lead to the inescapable conclusion that these cases have been prosecuted in bad faith and for purposes (and, even more strikingly, in a manner) not permitted under the Bankruptcy Code and other applicable law."
Last week, the city asked for an emergency hearing on a motion to unseal the Moyes documents. Moyes' attorneys said in a filing that the parties should get together and decide what material should be made public.
Balsillie has made failed attempts to purchase the Pittsburgh Penguins and Nashville Predators. Glendale cited a ruling in the Penguins case that upheld the validity of the lease.
The city also wants a hearing on Moyes' status as the lead unsecured debtor in the filing. Attorneys for Glendale dispute Moyes' contention that he lent the franchise some $300 million and would recoup $104 million under the Balsillie deal.
Glendale contends the lost money was equity, not a loan, and therefore he should be removed as a debtor. Under the anticipated Reinsdorf offer, Moyes would get little if anything.