Coyotes hearing strictly about mediation
Last Updated: Wednesday, September 23, 2009 | 12:05 PM ET
CBC Sports
Young Coyotes fans plead their case on placards before a pre-season game at Jobing. com Arena in suburban Glendale, Ariz. (Christian Petersen/Getty Images)Judge Redfield T. Baum has scheduled a final hearing Wednesday between the lawyers representing the two competing bidders for the bankrupt Phoenix Coyotes to see if they should be ordered into mediation.
Coyotes majority owner Jerry Moyes, the lead debtor who filed for Chapter 11 bankruptcy protection on May 5, filed an emergency motion last Friday requesting mediation between the team's pursuers — Jim Balsillie and the NHL.
Baum has allotted 30 minutes to hear the lawyers' arguments, but the expectation is he will realize mediation is useless at such a late juncture in the case.
Both bidders remain entrenched and the bitterness is genuine, with Balsillie portrayed by the NHL as "a desperate man" lacking "good character and integrity" and the Canadian billionaire lashing back at the league for tolerating "criminals" as owners.
"His qualification to become an owner is not something that the NHL can compromise and it is not something the NHL is willing to mediate," the league said in response to the filing.
Moyes initially intended to facilitate the sale of the Coyotes in bankruptcy court to Balsillie, whose $242.5 million US bid is contingent on relocating them in Hamilton.
But five months and more than 1,000 filings later, Baum has yet to rule on whether Balsillie or the NHL or neither will win the Coyotes in a court-supervised auction.
Most of the major secured creditors, notably SOF Investments and the City of Glendale — the Phoenix suburb where the Coyotes play — have backed the NHL's bid of 140 million US bid because the league intends to keep the team in Phoenix for the time being.
Not only do the other creditors consider the competing bids to be equal because Balsillie has promised $104 million US to Moyes, but they said the key issues listed in Moyes's motion for mediation have already been discussed ad nauseum.
What they want is a final ruling on ownership, not mediation.
"Any imposed mediation will unnecessarily delay the court's determination regarding the outcome of the auction and related issues to the detriment of SOF and other creditors," SOF lawyers wrote in a filing.
Moyes was granted 2½ minutes Tuesday to convince city council to support Balsillie, but he was swiftly rebuffed and left the chamber claiming council "had their head in a hole."
Restricted Territory
Not expected to be on Wednesday's agenda is the controversial issue of territorial rights and whether or not the Toronto Maple Leafs have the right to veto a proposed move to Hamilton — a city within Toronto's sphere of influence. Judge Redfield T. Baum acknowledged in earlier hearings that territorial rights have little bearing on the bid process because the NHL reaffirmed in court the Maple Leafs retain the right to veto the insertion of an expansion team in Hamilton — not an existing team seeking to relocate elsewhere.
'A character or integrity issue'
Balsillie, the co-CEO of Research in Motion Ltd., maker of the BlackBerry smartphone, is seeking a level playing field in his pursuit of the bankrupt Coyotes so he supports mediation.
The NHL, on the other hand, is vehemently opposed to mediation because the board of governors has rejected Balsillie's application for ownership by a vote of 26-0 with three abstentions (Buffalo Sabres, Pittsburgh Penguins and Toronto Maple Leafs).
"In my history, my roughly 30-year history in professional sports, generally it does not get this far," NHL commissioner Gary Bettman testified in an Aug. 20 deposition. "Somebody who is having admission problems because there may be a character or integrity issue generally does not push it far enough to a vote — they typically drop out."
The resentment between Balsillie and the NHL — and the reason why mediation is viewed as pointless — has intensified since he tried — and failed — to buy the Pittsburgh Penguins and Nashville Predators so he could move them to Hamilton.
Balsillie struck a tentative agreement with Mario Lemieux to purchase the Penguins for $175 million US in 2006, but Bettman intervened and reportedly imposed restrictions to ensure the team would stay in Pittsburgh.
Balsillie later agreed to purchase the Predators for $238 million US from Craig Leipold in 2007 and began accepting deposits for season's tickets in Hamilton — a move that miffed the NHL and led to Leipold scuttling the deal and selling the team to local interests for considerably less.
Leipold was later rewarded for his loyalty with majority ownership in the Minnesota Wild, and Balsillie has since irked board members by pursuing the Coyotes in bankruptcy court.
"My personal view was formed partially based on his activities with regard to … the Coyotes endeavour," Boston Bruins owner Jeremy Jacobs testified Aug. 19 in a deposition. "There were parts that I found objectionable in that [endeavour] and it indicated a course of conduct."
With files from The Canadian Press
