Phoenix Coyotes owner Jerry Moyes has agreed to sell the beleaguered club to the NHL.
The agreement was announced in U.S. bankruptcy court in Phoenix on Monday, and still has to be approved by presiding Judge Redfield T. Baum. It came after attorneys met for more than an hour during a recess in a status hearing on the case.
But Wayne Gretzky, former Coyotes coach who has a $22.5 million US claim in the case, has not agreed to the deal.
According to Moyes' lawyer, the decision to make a deal came from the fact that the costs of running the club right now are coming out of the league's $140 million US offer, which is now down to $128 million with the new expenses deducted.
"That's coming out of our mouths," Carolyn Johnson, Moyes' lawyer, said. "That certainly was pressure to settle."
Moyes said he loaned about $100 million to the franchise, but stands to recover only a fraction of that amount.
Asked if Moyes was happy about the deal, Johnson replied, "Nobody's happy about losing that much money." Moyes didn't speak to reporters after the hearing.
The sale would give SOF Investment, the largest secured creditor, $80 million US. The league would get $37 million for funding the team since last fall. Between $9 million and $11 million would be available to be divided between Moyes and Gretzky.
NHL deputy commissioner Bill Daly said that the league will begin work to sell the team immediately after the deal closes. The league hopes it can sell the team to an owner who will keep the team in Phoenix.
"Obviously, the pieces fell into place," Daly said after the hearing. "The focus now has to shift to getting the club out of bankruptcy and finding a new owner. I'm pleased with the outcome today."
The league is hoping to close a sale by Nov. 2.
Daly also confirmed that NHL officials, including commissioner Gary Bettman, met with representatives of Ice Edge Holdings LLC on Monday.
Ice Edge is a group of North American businessman fronted by Daryl Jones and Anthony LeBlanc looking to buy the Coyotes and keep them in Phoenix.
The group submitted a bid of $150 million US for the Coyotes in bankruptcy court but withdrew it on Sept. 9.
Daly said other buyers have also expressed interest, but he didn't identify them. The agreement is expected to be submitted to court as early as Tuesday.
"I'll read it when I get it," Judge Baum said in court. "I don't think I can say anything more about that."
The judge set a Friday morning deadline for objections from other creditors, and said he would hear objections on Nov. 2.
Daly said the NHL's bid remains essentially unchanged.
Canadian billionaire Jim Balsillie ended his bid to buy the bankrupt franchise and relocate it to Hamilton on Sept. 30, only hours after Judge Baum rejected both his $242.5 million US offer and the NHL's bid in bankruptcy court.
Baum rejected Balsillie's bid "with prejudice," and the NHL's "without," suggesting the league only needed a few tweaks to its bid for it to be accepted.
The judge expressed concern over the NHL's omission of Coyotes majority owner Jerry Moyes and former head coach Wayne Gretzky on its list of creditors to be paid.
Baum sided with the NHL on three points — the right to approve membership; the right to control where teams play; and the right to a relocation fee — and, in doing so, avoided setting a legal precedent feared by all major professional sports leagues.
Moyes claimed to have lost more than $200 million US in equity and accumulated $100 million in debt since partnering with developer Steve Ellman and Gretzky to buy the team for $90 million in 2001.
Moyes filed for Chapter 11 bankruptcy protection on May 5, with the express purpose of selling the Coyotes to Balsillie over the NHL's vehement objections.
Balsillie, the billionaire co-CEO of BlackBerry maker Research In Motion, has been thrice shut out on attempts to buy an NHL club. Deals to purchase the Pittsburgh Penguins in 2006 and the Nashville Predators in 2007 both fell through at the 11th hour.