NHL accuses owner Moyes of foul play
PHOENIX -- The NHL is accusing Phoenix Coyotes owner Jerry Moyes of trying to derail the sale of the team to a group headed by Jerry Reinsdorf by filing a flurry of requests for depositions before the July 24 deadline for formal submission of the bid.
The league also says another potential buyer for the team has surfaced. The NHL did not identify the would-be purchaser and said in documents filed in U.S. Bankruptcy Court this week that it was uncertain whether the person's interest would lead to a formal offer to buy the club.
Reinsdorf, owner of baseball's Chicago White Sox and the NBA's Chicago Bulls, plans to submit a $148 million offer to buy the team and keep it in Glendale, where the team has lost more than $30 million in each of the last three seasons.
Despite the team's dismal history since moving from Winnipeg in 1996, the NHL contends the Coyotes can succeed in the desert with better management and more success on the ice.
Among those Moyes wants to question are Reinsdorf, NHL commissioner Gary Bettman and deputy commissioner Bill Daly, and Glendale city manager Ed Beasley.
The NHL, in a court filing this week, called the interview requests -- known as "Rule 2004 Motions" under the U.S. Bankruptcy Code "nothing more than Moyes' attempt to frustrate the sale of the Coyotes in Glendale."
While saying little about the purported new potential purchaser, the NHL said Moyes' requests for discovery -- testimony and other evidence -- "is intended to, and may in fact, chill any such bid."
Judge Redfield T. Baum has indicated repeatedly that he has little use for so-called "potential" purchasers until they've made their intentions known to the court.
Moyes backs Canadian billionaire Jim Balsillie's offer to buy the team for $212.5 million and move it to Hamilton, Ontario. Under Moyes' Chapter 11 filing, he would receive $100 million as part of the Balsillie sale.
Moyes could wind up with little, if anything, under the Reinsdorf deal. The city of Glendale, in a court filing, contended the $100 million was not a loan to the team, as Moyes has characterized it, but should be considered equity, thereby removing it as a debtor obligation.
Glendale also has challenged the claims of Wayne Gretzky, the team's coach and owner of a small share of the franchise, of $22.5 million under the Balsillie agreement. Court documents have shown Gretzky is paid about $7 million a year, making him one of the highest-paid coaches in sports.
Glendale has filed a "2004 Motion" to get depositions from Moyes and his wife Vickie, Gretzky, and others.
Baum scheduled a hearing Monday to sort out the latest claims in a case that, as of Thursday, had 419 filings on record since Moyes took the team into Chapter 11 bankruptcy on May 5, to the surprise of the NHL.
Baum rejected Balsillie's initial bid to buy the team, citing the inability to meet the June 22 deadline imposed by the Canadian. This week, the judge signed an order setting out a dual track for selling the team.
First, the judge will accept bids to keep the team in Glendale with sale approval scheduled for Aug. 5. If there is no acceptable bid by then, the court will then consider offers to move the team, reopening the door for Balsillie.
Moyes, who considers himself the lead unsecured creditor, is seeking the release of details of Reinsdorf's bid as well as interviews with the parties involved to determine whether it is "a bonafide and good faith offer, and is in the best interest of the estate and all of its creditors."
The NHL characterizes the process sought by Moyes as a waste of time as the league works with the Reinsdorf group and Glendale to develop details of the bid under a tight timeline. The league said that the time for questioning those involved should come after the formal bid is submitted and the details are known.
"Until the Reinsdorf group presents a definitive proposal to acquire the Coyotes in Glendale, it will not only be meaningless to conduct discovery, but it will also waste precious time and resources," the NHL said.
Glendale wants to hold the Coyotes to the terms of the lease to play in Jobing.com Arena, which was built by the city for the hockey team. However, the Reinsdorf proposal hinges on reworking the team's agreements with the city to make it more favorable for the franchise.
That creates a tricky political environment for the city council, which would have to approve any new deal. The conservative Goldwater Institute has sued the city in state court after being denied access to records of Glendale's negotiations with Reinsdorf.
The institute successfully sued the city of Phoenix over subsidies given to developers of a shopping mall. That case is now before the Arizona Supreme Court.
Copyright 2009 by The Associated Press