Owner of Bulls, Sox Offers $148 Million for Bankrupt Coyotes 29/06/2009 |
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The owner of the National Basketball Association’s Chicago Bulls and Major League Baseball’s Chicago White Sox offered to buy the bankrupt Phoenix Coyotes of the National Hockey League for $148 million.
Jerry Reinsdorf’s bid would compete against one from Jim Balsillie, co-chief executive officer of Blackberry-maker Research In Motion Ltd., who has offered $212.5 million on the condition he’s allowed to move the team to Canada.
Reinsdorf’s offer was submitted yesterday at the deadline set by U.S. Bankruptcy Judge Redfield T. Baum for bidders willing to keep the team, partly owned by Wayne Gretzky, at its current location in the Phoenix suburb of Glendale.
The offer hinges on Reinsdorf’s ability to persuade holders of $127.8 million of debt to withdraw or renegotiate their claims, according to a filing in U.S. Bankruptcy Court in Phoenix by Kelly Singer, a lawyer in charge of restructuring the bankrupt franchise.
The “buyer would negotiate the withdrawal of the claims by such third parties on terms and conditions reflected in modified or substitute agreements,” Singer wrote.
The claims include $79.7 million owed to MSD Capital LP, $38.8 million owed to the NHL and $3 million owed to the city of Glendale, according to the filing.
Reinsdorf’s partner in the purchase is John Kaites, and Tony Tavares will join the group, according to the filing. Other equity investors will also become members, Singer said, without naming them.
Possible Second Auction
Baum decided to hold the Coyotes auction on Aug. 5 for bidders willing to keep the team in the Phoenix area, a proposal supported by the hockey league. If the auction fails, Baum will hold a second one in September that would be open to bidders who want to move the team, including Balsillie.
“This is a troubled franchise and this court has an obligation to try to get the best outcome possible,” Baum said at a June 22 hearing.
Baum had been asked by the Coyotes and the NHL to decide which of two competing auctions to approve. Team managers wanted to consider all offers at once, while the NHL proposed the two- phase auction.
Coyotes owner Jerry Moyes sought Chapter 11 protection for the team on May 5, citing almost $400 million in losses.
Gretzky, the NHL’s all-time leading scorer, has run the team’s hockey operations since 2001 and has been head coach the past four seasons. Gretzky is owed $22 million under his contract with the Coyotes, making him a creditor in the bankruptcy case.
(Source: Bloomberg)
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