Q&A: Making sense of Coyotes auction
Judge Redfield T. Baum presided over more than eight hours of testimony in the bankruptcy hearing of the Phoenix Coyotes in Arizona on Thursday.
Baum hinted at the possibility that neither Canadian billionaire Jim Balsillie nor the NHL could be awarded the franchise in the coming days, heard a slew of information on the disputed Hamilton relocation fee, and was informed that the league would not cross-examine Balsillie on Friday.
NHL commissioner Gary Bettman, however, still remains fixed in the Balsillie camp's crosshairs, and will take the stand to defend his position on the beleaguered Coyotes franchise.
In order to wade through all the legalese, CBCSports.ca contacted experts Richard Powers, associate dean at the Rotman School of Management in Toronto, and Richard McLaren, a University of Western Ontario professor specializing in bankruptcy and sports law, to set the stage for another busy day in court on Friday.
CBCSports.ca: Judge Baum hinted Thursday at the possibility of no sale to either Balsillie or the NHL, and instead dissolving the franchise and its assets. How significant was his statement, and do you think he will follow through with it?
Powers: "There's a lot of stakeholders here that are waiting for a decision. So to suggest now that that decision won't be made, I think just heightens the pressures on everyone."
McLaren: "I've never seen a judge who has pursued a 'I don't want to make a decision' strategy to the extent that this person has. If you think about it for a second, [the 'no sale' decision] is a complete impossibility. His obligation is to find the highest value possible for the creditors who are unpaid.
"Deferring, delaying, setting up the circumstances for the parties to negotiate, that strategy's been pursued by the judge since May. And it's a complete flop. It hasn't worked at all, and he ought to get off that horse and start making decisions."
Most of the talk in court on Thursday was about the disputed relocation fee. How significant is this fee to the overall fight for the Coyotes?
McLaren: "It's huge, because Balsillie's bid is conditional on relocation.
"[But] how does [Judge Baum] make a decision between an extreme of $10 million US and $200 million?
"How does the judge decide that it should be anywhere in between, other than saying 'OK, it's going to be half, we'll settle at 100.' That's about the only rational thing he can do. He doesn't have enough information to make any other decision."
Powers: "If he sticks to his knitting, he should just let them worry about that. He's a bankruptcy court judge, not a marriage counsellor. He should just concentrate on what he knows and what he does best. And once his decision is made, it's up to the parties to work out the details."
What do you think of the NHL's decision not to cross-examine Jim Balsillie?
McLaren: "That doesn't surprise me. They think that they've got him locked in by their strategy. Nothing's added by letting him have his own soap-box to answer questions. If the question is asked of him, he may get into a whole lot of things that they don't want to get into.
"So if you want to control the proceedings, you don't ask him any questions."
What about the Balsillie camp's decision to take a shot at cross-examining Bettman?
McLaren: "I don't think they have any choice but to do so. They have to put him on the stand and they have to try and attack his position in cross examination."
How do you think Bettman's testimony will play out on Friday?
McLaren: "I think [Balsillie's lawyers] will hammer on a few things. How is it that the [NHL Board of Governors' vote on Balsillie's viability as an owner], which seemed to be called and done hastily, comes out 26-0, with four abstentions, with all the teams that have been affected in the past or are now affected abstaining? [Toronto, Nashville, Phoenix, and Pittsburgh]. I think you'll want to focus on is there a real outcome there, was there an informed debate before a vote was taken.
"I think the other issue is the whole process of relocation and what are the rules about relocation. The NHL's been very unspecific about them and the [Toronto Maple Leafs] seem to be quite confused about them, or have a completely different view, so I think that will be an area of focusing on."
How significant will Baum's impending ruling be in the case?
Powers: "Huge. The big question is, if Balsillie wins and the NHL appeals, can he move the team before the appeal is heard? What they'll probably try to get is a stay of execution on the move, that'll be the first motion, and if they're granted that you won't be able to move until the appeals are heard.
"[But] unless he tidies up things pretty quick, I don't think he's going to make the ruling tomorrow. I think he'll wait. Every time he's made a decision it's been very well thought out, very well reasoned. And he's asked for time several times before. So I just don't see him listening to the submissions and then barking out a decision. He's going to need some time. I think he'll take it."
How long can the fate of the Coyotes be tied up in court?
Powers: "The decision will be made in the next few days. After that, all kinds of things can happen. This could drag on for a while. But what that does though, even though the uncertainty is still there, [is that] it keeps the team in Phoenix. They're there right now."
McLaren: "At this point it's unfathomable how long it could be. ... There are infinite ramifications of a decision favouring one side or the other, and a whole lot more legal proceedings and legal instances which, at the end of this I think we'll count them all up and say 'Why didn't we just spend that money on what was offered [in the bids] and satisfy the creditors and never have this fight?'
But these are turf wars about serious pieces of turf, so that's not what's going to happen."