Judge approves sale of bankrupt Coyotes
A U.S. federal bankruptcy judge in Phoenix, Ariz., has given his approval to the sale of the Phoenix Coyotes to the NHL.
Judge Redfield T. Baum agreed to sign the sale order on Monday after attorneys made minor modifications to the deal.
None of the changes significantly altered the NHL's agreement to pay about $140 million to buy the team from owner Jerry Moyes.
The only party who didn't join in the agreement is former coach Wayne Gretzky, who owned a small portion of the team.
However, Gretzky did not file a formal objection with the court.
The sale ends nearly six months of an often bitter court battle pitting the NHL against Moyes and Canadian billionaire Jim Balsillie.
Moyes, founder of Swift Transportation, took the team into Chapter 11 bankruptcy on May 5, with a plan to sell the team to Balsillie, contingent on moving the franchise to Hamilton, Ont.
The move took the NHL by surprise, and the league vowed to fight it to the end, accusing Moyes and Balsillie of trying to circumvent the NHL's rules for who owns a team and who decides where it plays.
Balsillie, co-owner of BlackBerry maker Research In Motion, kept up the court fight until Baum rejected his bid on Sept. 30. Balsillie's offer grew to $242 million when he added $50 million in a failed attempt to get the City of Glendale to drop its opposition.
Glendale, Ariz., is the Phoenix suburb where the Coyotes' home arena, Jobing.com, is based.
The City of Glendale issued a statement thanking the NHL for its work.
"This now opens up the opportunity to initiate and finalize negotiations with other parties for the long-term success of the team in Glendale," the city said.
Baum threw out Balsillie's bid on the grounds he could not overrule the NHL board of governor's 26-0 vote rejecting the Canadian as an owner. The judge also rejected the NHL's offer but left open the possibility the league could buy the team if it made alterations to its proposal.
Ice Edge, Argos owners still interested
In the end, Moyes decided a few million dollars was better than none and reached an agreement with the NHL. As part of the deal, the league will reduce the amount of money it says Moyes owes it from $30 million to $15 million.
The league plans to resell the team, preferably to a buyer who would keep the team in Glendale. The city vehemently opposed Balsillie's bid.
NHL deputy commissioner Bill Daly was encouraged by the result.
"We are pleased and very encouraged by today's developments in court. Now that approval of the proposed sale has been entered by the court, the National Hockey League will work to close the transaction quickly and assume full control of the Coyotes' business operations.
"The league also will engage immediately in a process to identify — and expedite sale of the franchise to — new ownership that is committed to the club's long-term success in the Phoenix-Glendale area, " Daly said in a statement from the league.
The deputy commissioner also thanked the team's supporters.
"The NHL thanks Coyotes fans for their continued support of the franchise and hopes that today's developments will provide fans further reason to embrace the Coyotes in order to ensure the team's long-term future in Arizona," Daly said.
Under the purchase agreement, all the unsecured creditors would be paid except Moyes, Gretzky and Glendale. The largest secured creditor, SOF Investments, will get all of its $80 million, either in cash or over time in an agreement with the NHL.
Gretzky, who resigned as coach, says he is owed about $8 million, mostly in deferred salary.
The amount of money available to Moyes and Gretzky was dwindling because the league continued to fund the club, with that cost coming out of the purchase agreement.
Moyes has contended that the NHL never will succeed in the desert, but the league says the team can succeed with a better product on the ice. The Coyotes are off to a good start this season, but crowds at Jobing.com Arena have been sparse.
Ice Edge, formed by a group of investors from the United States and Canada, says it still is interested in buying the team. The owners of the Canadian Football League's Toronto Argonauts, Howard Sokolowski and David Cynamon, also reportedly have interest in purchasing the team.