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RIM CEO Jim Balsillie

MARK BLINCH/Reuters File

Jim Balsillie and the City of Hamilton are still in the game of NHL Pursuit, thanks to Judge Redfield T. Baum of the U.S. Bankruptcy Court.

The judge ordered Wednesday that Balsillie's $212.5-million (all currency U.S.) offer for the Phoenix Coyotes must be included in a Sept. 10 auction for the club. The NHL is opposed to the bid from the co-CEO of Research In Motion because his bid is conditional on moving the team to Hamilton.

"We're in!" Balsillie's lawyer, Richard Rodier, exulted in an e-mail message shortly after his flight from Phoenix touched down in Toronto Wednesday night.

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Balsillie's bid will now be considered along with two bids that pledge to keep the Coyotes in the Phoenix suburb of Glendale.

However, the bids from Chicago White Sox and Chicago Bulls owner Jerry Reinsdorf and a group of Canadian and U.S. businessmen known as Ice Edge Holdings LLC, are conditional on negotiating a new arena lease with the City of Glendale and new terms with the club's creditors. Neither has been officially filed with the court.

If Balsillie's bid is successful on Sept. 10, this will present more problems for the NHL since it rejected Balsillie as a prospective owner last week. The judge noted the NHL, Glendale and the two Glendale bidders all opposed the Balsillie bid for reasons ranging from the lack of time after the sale to accommodate a franchise move to the brushing aside of NHL rules to the economic damage to the city.

But, Judge Baum added in his decision, lawyers for the club's largest creditor, computer tycoon Michael Dell, wanted Balsillie's bid included since it was the only one that offered to settle its $80-million debt in cash and in full. Balsillie's legal strategy has banked on the fact the bankruptcy court's first obligation is to obtain the best possible outcome for the creditors.

Reinsdorf plans to offer $148-million for the Coyotes while Ice Edge says it will offer $150-million. But both bids contain relatively little cash up front and plan on assuming club debt.

"As the only bidder with a firm offer before the bankruptcy court to purchase the Phoenix Coyotes, we obviously agree that Jim Balsillie belongs in the Sept. 10 auction," Balsillie's spokesman Bill Walker said after the ruling. "From the time his bid was launched, Jim Balsillie has said that all he is asking for is a chance to bid for the Coyotes at auction through the bankruptcy court process on a level playing field and let the best bid win. That's fair and transparent.

"It's the best outcome for creditors and for the future of the franchise."

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The decision was a blow to the NHL but Bill Daly, the league's deputy commissioner, vowed to stay the course.

"We also remain confident that Mr. Balsillie's bid for the team will never be approved by the court for a variety of reasons, including that his application for ownership was overwhelmingly rejected by the [NHL]" Daly said. "We look forward to making significant steps toward resolution of this unfortunate situation over the next several weeks."

Judge Baum recognized including Balsillie in the Sept. 10 hearing and sale will raise a lot of legal issues that could drag the proceedings out for days. He called for a hearing on Aug. 11 to draw up a schedule for pre-trial motions and discovery requests. He will also decide which issues will be heard on Sept. 10 and asked all parties to try to agree on them before the Aug. 11 hearing.

Earlier in the day, Judge Baum postponed a hearing to find if Moyes and his lawyers would be found in contempt of court. Lawyers for Glendale demanded that Moyes and his lawyers be found in contempt for revealing information about arena-lease negotiations with Reinsdorf that were subject to a confidentiality agreement. Moyes's lawyers said it was an "inadvertent" mistake. No reason was given for the postponement nor was a new hearing announced.

Even if Balsillie proves to be the winning bidder on Sept. 10, he will probably still have a long way to go before he actually forces his way into the NHL club. Judge Baum acknowledged in a hearing on Monday that lawsuits will likely be filed by at least some of the losing bidders.

This almost certainly will include the NHL, which has made it clear it wants practically anyone except Balsillie as an owner. The league said in a court filing its governors unanimously rejected Balsillie as an owner because he "lacks the good character and integrity required" by the league's constitution and bylaws.

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The support of the Coyotes' largest creditor played a large role in the decision. SOF Investments is a hedge fund owned by the Dell family. One of Dell's lawyers told the judge earlier this week that all SOF wants is to be paid in full and in cash. At this point, the lawyer said, only Balsillie's bid will do that.

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