Arizona bankruptcy judge Redfield T. Baum has ruled “no sale” in the case of the Phoenix Coyotes, thus rejecting bids of the National Hockey League and Jim Balsillie, who was looking to purchase the team and relocate it to Hamilton, Ontario, Canada.
In not ruling for either side, the Coyotes will continue to be ward of the NHL. The judge will not allow the sale of the Coyotes by the league unless all creditors, minus current owner Jerry Moyes, who claims $100 million in losses, and Wayne Gretzky, who is looking for $9.3 in losses, are addressed.
“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,” Baum wrote in his decision (select Read More to see the entire ruling).
Balsillie’s bid was rejected due, in part, to the issues of relocation and the league structure, which, for the NHL, involves their constitution. As Baum wrote, “Generally it is relatively easy to determine how to adequately protect economic interests. In this court’s view, determining how to adequately protect non-economic interests, particularly the interests claimed here by the NHL is exceedingly more challenging... The very nature of professional sports requires some territorial restrictions in order to encourage participation in the venture and to secure to each venturer the legitimate fruits of that participation.”
In his conclusions Baum wrote:
“[T]he court can not approve the bids by (Balsillie) and the NHL. Therefore, (Balsillie's) bid is denied, with prejudice because the interests of the NHL can not be adequately protected as required by Section 363(e) if the sale to (Balsillie) were approved. The NHL’s bid is denied, without prejudice. As stated…, the NHL can probably cure the defect in its bid if it elects to make the required amendment(s)”
According to Chris Johnson of the Canadian Press who reported via Twitter, Balsillie was quoted as saying, "I respect the court’s decision."
Bill Daly, Deputy Commissioner of the National Hockey League, released the following statement regarding the ruling by Judge Baum:
"We are pleased that the Bankruptcy Court has confirmed the League’s rights to select its owners and the location of its franchises. We are reviewing the opinion and considering how we can best address the Court’s concerns regarding our offer to purchase the Coyotes. It remains our goal to secure the long-term stability of the Coyotes in Glendale."
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