Judge says could reject both NHL and Balsillie bids 11/09/2009 |
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The judge overseeing the case of the National Hockey League's bankrupt Phoenix Coyotes has raised the possibility of rejecting both current bids for the money-losing team.
Judge Redfield Baum of U.S. Bankruptcy Court in Phoenix said at a sale hearing on Thursday that he could determine that bids by both the National Hockey League and Canadian billionaire James Balsillie were unacceptable.
"Just so we're all clear, there is a third possibility -- no sale," Baum said. "It's more than theoretical. You all ought to keep that in mind."
The judge did not specify what would happen to the Coyotes if he made that ruling.
NHL Commissioner Gary Bettman declined to comment on the judge's statement during a break.
He and Balsillie had been scheduled to take the stand on Thursday, but their appearances were pushed to Friday.
Thomas Salerno, an attorney for Coyotes owner and trucking magnate Jerry Moyes, said one possible option could be that the NHL continued to fund the team until a buyer was found.
The Coyotes, one of the NHL's 30 teams, filed for bankruptcy protection in May.
Baum also said it was difficult to compare the bids because they each would have very different effects on various creditors.
Balsillie, co-chief executive of BlackBerry maker Research in Motion Ltd (RIM.TO), has bid $242.5 million for the franchise on condition that he be allowed to move it to Hamilton, Ontario.
The NHL opposes the team's relocation but has only guaranteed one more year in Glendale, the Phoenix suburb where the team plays its games.
The Coyotes have never made a profit since moving to Phoenix from Winnipeg, Manitoba, in 1996.
The NHL has bid $140 million for the team in addition to offering to give any resale profits to the creditors, which include an investment firm controlled by Dell Inc (DELL.O) CEO Michael Dell.
Last month, the NHL entered the auction process in an effort to shift control of the sale process away from the bankruptcy court.
Ice Edge Holdings, a third group that included current Coyotes coach and part owner Wayne Gretzky -- hockey's all-time leading scorer -- dropped out of the auction on Wednesday.
Baum still must decide whether to include Balsillie's bid over the NHL's wishes. Last month, league owners rejected Balsillie's ownership application.
NHL officials have vowed in court to appeal a Balsillie victory if it occurs, arguing that the league has the right to control whom teams are sold to and where they play.
An attorney for Glendale urged Baum to accept the NHL bid, saying the league had offered the city the best chance to retain the team.
The attorney said Glendale was confident the Coyotes would stay there for many years if the NHL won the bidding.
(Source: Reuters)
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