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Coyotes bankruptcy update: NHL wants control of Coyotes
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The NHL wants control of the Phoenix Coyotes.
The National Hockey League filed a motion with the U.S. Bankruptcy Court yesterday asking for control of the team. The league first asked for control of the team after owner Jerry Moyes put them into bankruptcy on May 5.
The NHL claims that Moyes gave up control last fall and they want “lawful control” of the team to prevent further financial damage.
According to the Hamilton Spectator, the NHL said, “These cases [Moyes, Balsillie] were not filed in good faith to stave off an impending financial crisis or to affect a reorganization for the good of the creditors. Rather, they are part of a self-serving scheme to advance the interests of just two parties.”
The NHL also goes on to site e-mails from Balsillie’s chief legal strategist Richard Rodier. The messages show that they wanted to avoid an open bid for the team.
“The concept is very simple,” says one e-mail to Moyes’ lawyer. “We basically take over the team.”
If the league’s motion is successful, Deputy Commissioner Bill Daly will manage the business affairs of the team while a bankruptcy trustee will replace Jerry Moyes.
No rulings from the judge
Judge Redfield T. Baum did not give an immediate ruling on whether Richard Rodier would be allowed to sit in on the depositions of four NHL executives.
The league has asked that Rodier not be allowed to sit in on the depositions because he himself is being examined. According to league documents, individuals who are being examined can be excluded from sitting in on the depositions of others under U.S. bankruptcy law.
Commissioner Gary Bettman, Bill Daly, Boston Bruins owner Jeremy Jacobs and Minnesota Wild owner Craig Leipold are all expected to give depositions on the NHL’s behalf.
The NHL also asked the court to rule yesterday that no matter who wins the September 10 bankruptcy auction, the team has to remain in Phoenix for the 2009-10 season, but no decision was given on that either.
Despite the auction taking place just days before the first preseason game, Jim Balsillie claims that he can move the Coyotes to Hamilton next month.
An NHL lawyer told the court that a move at this point in the year is impossible because the schedule has been finalized, television schedules have been finalized and travel arrangements have already been made.
The league is also asking for a number of documents from Team Balsillie. They believe that Balsillie and his lawyers were helping the Goldwater Institute in regards to the Coyotes.
The institute has been monitoring the Coyotes bankruptcy proceedings. They are against the City of Glendale giving out any taxpayer incentives to keep the team in the Valley.
A hearing will be held September 2 to decide whether Jim Balsillie will be allowed to participate in the September 10 auction.
(The Toronto Star and The Globe and Mail were also used as sources for this story)
Writer’s note: Yesterday I reported that there would be a hearing today. That hearing was yesterday. The U.S. Bankruptcy Court schedule didn’t have anything listed for Tuesday and had a hearing listed for Wednesday. I apologize for any confusion this may have caused.
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