U.S. Bankruptcy Court Judge Redfield T. Baum allowed Phoenix Coyotes owner Jerry Moyes to ask bidder Jerry Reinsdorf's group about collusion with the City of Glendale and the NHL yesterday.
Moyes was also ordered to appear in court today to defend himself against charges of misconduct levelled by the city. Judge Baum will decide Moyes's fate on charges of contempt of court this morning.
A few hours later, the judge is expected to decide if an auction for bidders seeking to relocate the Coyotes will follow the one on Sept. 10 for Reinsdorf and one other bidder, Ice Edge Holdings LLC, both of whom plan to keep the Coyotes in Glendale.
The judge will also rule on whether a $212.5-million (all currency U.S.) offer from Research In Motion co-chief-executive-officer Jim Balsillie can be part of the relocation auction even though the NHL has said it will not accept him as an owner. It appears Judge Baum may hold one auction for all three bids.
The judge allowed Moyes to have his lawyer question Reinsdorf or his partner, John Kaites, a controversial Phoenix-area lobbyist and former politician, yesterday about possible collusion with Glendale officials or the NHL. No information about the session was filed with the court.
While Moyes has long questioned how Glendale officials treated him compared to Reinsdorf, the issue was given a fresh push following a story in the Phoenix New Times newspaper on Monday. The story raised questions about the relationships between Glendale city manager Ed Beasley, who is leading the arena negotiations, Reinsdorf, Kaites, Reinsdorf's son Michael and two companies hired by Beasley to study the Coyotes' situation.
One of those companies, IFG, is owned by Michael Reinsdorf. The other one, Beacon Sports Capital Management, was hired last October by Beasley to provide a supposedly independent study of the Coyotes' finances after former Coyotes chairman Jeff Shumway and Moyes told Beasley the team was in financial trouble and needed help from the city to survive. The Phoenix New Times story said Beacon Sports has a history of doing business with Michael Reinsdorf.
Earlier, Shumway said in a court document that Beasley never showed any interest in helping Moyes. Shumway said Beasley once told him he would only be interested in making lease concessions to a new owner, not Moyes. Shumway also said Beasley would not inform city council of the problems and accused the city manager of asking him to destroy a letter Shumway wrote outlining the issues. Beasley denied the allegation.
There has been no indication Beasley or any other Glendale official has agreed to Reinsdorf's demands. But city council has not been kept apprised of the negotiations.
Glendale Mayor Elaine Scruggs did not respond to a request for comment.
Councillor Joyce Clark declined to comment other than to say council will not make financial subsidies to any Coyotes owner.
"There has been no discussion of concessions," she said. "Council's direction [to Beasley]made it very clear we're not interested in using city money to subsidize any potential owner of the team."
Moyes came under attack by the city and the NHL when his lawyers "inadvertently" revealed confidential information in a court filing last Friday. The document showed Reinsdorf is seeking $23-million a year in subsidies from Glendale as part of a new arena lease and wants an escape clause in 2014 if the team is losing money.
Yesterday, the city filed another document again asking the judge to find Moyes in contempt of court and end his involvement with the sale. It cited "new evidence" apparently gleaned in examinations last week of Moyes and Shumway, but the information was filed under seal.
Both the city and the NHL said Reinsdorf threatened to withdraw his bid when the confidential information became public.
Moyes dismissed the charges by the Glendale lawyers in a filing with the court yesterday.
"After all the breathless allegations are fully aired in court, what will be shown is that some confidential-designated information was inadvertently put in the public record due to mistake of Mr. Moyes' personal counsel, nothing more," the filing said. "As soon as the mistake was brought to the attention of Mr. Moyes' personal counsel, it was remedied."