As reported on National Post website:
Quote:
An Arizona bankruptcy court judge has followed through on a threat made in open court, rejecting both the National Hockey League and Canadian billionaire Jim Balsillie in their bids for the Phoenix Coyotes, leaving the team's future uncertain.
Judge Redfield T. Baum rendered his decision on Wednesday, acknowledging the battle had been "hotly and vigorously contested by all of the involved parties," but deciding he "can not approve either bid."
"PSE's bid is denied, with prejudice because the interests of the NHL cannot be adequately protected as required ... if the sale to PSE were approved," Baum wrote in his 31-page decision. "The NHL's bid is denied, without prejudice. As stated above, the NHL can probably cure the defect in its bid if it elects to make the required amendment(s)."
The decision was a definitive blow for Balsillie.
"This conclusion effectively is the end for the efforts of PSE ... to force a sale and relocation of the hockey team," Baum wrote, referring to Balsillie's company.
"In short, with prejudice means the judge isn't leaving the issue open – that is, he won't be reconsidering that bid," said Geoffrey Rapp, associate professor at The University of Toledo College of Law. "Without prejudice means he's not accepting the NHL's bid at this time, but that his decision on that point will not lead him to "pre-judge" a modified bid by the league."
Neither the NHL nor Balsillie issued an immediate public response.
"PSE clearly lost," said Eric Schaffer, a bankruptcy specialist and partner at the international law firm Reed Smith. "With prejudice means they're done."
Baum left the door open for the NHL, which had tabled a bid of US$140-million. He had trouble with the league's proposal because it minimized claims made by Coyotes owner Jerry Moyes and outgoing coach Wayne Gretzky.
Balsillie initially offered US$212.5-million to buy the team in May, after Moyes had filed it for bankruptcy. The offer was conditional on relocating the team to Hamilton, where the city had extended an arena lease option at Copps Coliseum.
"The NHL bid is denied, without prejudice," Baum wrote. "The denial of the NHL's bid could easily be cured by the NHL. In hockey parlance, the court is passing the puck to the NHL, who can decide to take another shot at the sale net, or it can pass off the puck."
More to come.
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This isn't really a big surprise. Balsillie had the wrong approach and some pretty poor legal advise about using (manipulating?) US bankruptcy law as a backdoor to getting a franchise. Baum had no precedent for this kind of sale and made it quite clear from the get-go that he wasn't looking to set one himself.
What now? I guess NHL will operate the team until a buyer can be found. Balsille has (most likely) permanently lost his dream of an NHL franchise, and Hamilton needs to find another white knight, one that can play the NHL game. I predict Phoenix will be playing in Las Vegas for the 2010-11 season.
Bottom line: Hamilton will never get a relocation team. Only a franchise expansion will bring the NHL here. Lord knows when that will be.
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