Coyotes Court Auction Ends With No Resolution, Judge To Rule Later

A two-day court auction of the beleaguered Phoenix Coyotes ended Friday without a resolution.

Judge Redfield T. Baum will hand down his ruling at a later date. There is no immediate word on when that might be. Both the NHL and BlackBerry billionaire Jim Balsillie tweaked their offers for the team as the clock wound down on the hearing.

Balsillie had offered to buy the Coyotes for some US$242.5 million, contingent on moving it to Hamilton, over the objection of the NHL.

The NHL had bid $140 million with plans to resell the franchise outside of bankruptcy.

But both sides sweetened some aspects of their deals during the final hours of the hearing.

The Balsillie camp amended its offer to guarantee that the city of Glendale, the Phoenix suburb where the Coyotes play, would receive $50 million free of any conditions. In his earlier bid, that amount could have been as low as $40 million. Balsillie also removed his Sept. 21 deadline for completion of the sale.

The NHL, meanwhile, kept its bid at $140 million but agreed that Coyotes owner Jerry Moyes and Wayne Gretzky, the team’s managing partner and head coach, should come away with some $14 million between them. Moyes would get the lion’s share of that.

Under the NHL’s initial bid, Moyes wouldn’t receive anything.

Commissioner Gary Bettman took the stand Friday. Balsillie had also been expected to testify but the league waived its right to cross-examine him.

Also Friday, Judge Redfield T. Baum floated the possibility again that he might reject both bids.

Baum said that a potential purchaser must satisfy several legal benchmarks.

“If you don’t both get there, it’s going to be hard to approve it,” he said.

NHL lawyer Tony Clark told the judge that, if both bids are tossed, the NHL would seek a ruling allowing it to take control of the team in preparation for a resale.

In other words, the league would not mind a “no sale” determination.

Balsillie lawyer Jeff Kessler, on the other hand, likened such a ruling to “letting the patient die.”

Meanwhile, Bettman said during cross-examination that the NHL didn’t decide to make a bid for the Coyotes until about 24 hours before submitting the offer.

Bettman, a lawyer by trade, projected confidence and calm during his 50 minutes on the stand.

Balsillie lawyers Thomas Salerno and Kessler each sought to show that Bettman broke oath during a deposition Aug. 20.

Speaking five days before the league submitted its bid for the team, the commissioner did not disclose any plans to buy the club. Kessler argued that keeping it secret “tainted” the NHL’s decision to reject Balsillie as an owner on July 29 because it was planning to bid against him.

Bettman contended the decision was only made at the last minute.

Balsillie wants the judge to overrule the NHL board of governors’ 26-0 rejection of him as an owner – the league deemed him untrustworthy. Balsillie also wants Baum to allow the team to be relocated without the league’s approval and to set a fee to be paid for that relocation.

While the NHL waived its opportunity to cross-examine Balsillie, it still had some critical comments about the persistent Canadian, who failed in previous attempts to buy the Pittsburgh Penguins and Nashville Predators.

NHL lawyers argued that Balsillie’s refusal to go through the proper league channels for getting a franchise led to him being rejected. All sales of NHL clubs need to be approved by the board of governors and owners are expected to apply to the league in order to relocate a team.

If Balsillie “wants to understand why he has been rebuffed in his sincere and indisputably passionate desire to be a team owner, what he needs to do is he needs to look in the mirror,” Clark said. “He brought this about on himself by his refusal to abide by the rules.”

“Perhaps someday (Balsillie) will meet up with a recognition on his part that he isn’t above the rules that apply to all the other NHL owners,” Clark said. “‘Maybe he will find a way to express an honest regret and a humility and acknowledge where he went wrong.”

If he apologizes, Balsillie would perhaps be able to “achieve his dream” to own a team, Clark said.

Clark said there are three requirements to be an NHL owner. The first two are to be wealthy and love hockey.

“Mr. Balsillie has that in spades,” Clark said.

The third requirement, the NHL lawyer said, is “to play by the NHL rules.” Then Clark cited a song by the singer Meat Loaf.

“It’s called ‘Two Out of Three Ain’t Bad,”‘ Clark said, “but that doesn’t cut it to own a team in the NHL.

Baum later warned the lawyers to not make their arguments personal.

“If I said anything that went over the line, I apologize your honour,” Clark said.

Kessler told the judge that the NHL and city of Glendale waived their right to cross-examine Balsillie in a “desperate” act aimed at preventing Baum from seeing what a good, upstanding citizen he is and that he shouldn’t have been rejected as an owner.

Kessler said evidence shows the NHL acted in bad faith in failing to consider relocation of the team to Hamilton.

As he has done several times, Baum referred to the fact that the ruling Balsillie wants would be unprecedented.

“Doesn’t it strike you as unusual,” he asked Balsillie lawyer Susan Freeman, “that in the bankruptcy code of 1978, 31 years later, nobody’s ever crossed this bridge before and approved this kind of relocation?”

Clark said the NHL considers Hamilton a potential area for expansion and is aware of the number of rabid hockey fans there.

“And we love every one of them,” he said.

Clark ridiculed Balsillie’s claim that the real reason for rejecting him as an owner was fear of a lawsuit from the Toronto Maple Leafs, believed to be the most valuable team in the NHL.

“They have spun a tale that rivals (Alice) Through the Looking Glass,” Clark said, referring to the Lewis Carroll tale.

“A Mad Hatter’s party here?” Baum responded.

The auction came one day before the Coyotes are to open training camp at Jobing.com Arena in Glendale.

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With files from The Associated Press