On a day that saw Phoenix Coyotes owner Jerry Moyes and would-be buyer Jim Balsillie intensify their legal war with the NHL and a third - albeit incomplete - bid for the team finally emerge, the only near-certainty at the end of a blizzard of court filings is that the auction sale planned for next Wednesday is unlikely to proceed.
Almost all of the parties involved asked the U.S. Bankruptcy Court to either postpone or cancel the sale, which is restricted to bidders who want to keep the Coyotes in the Phoenix suburb of Glendale. By late last night, the only major party which did not make the request was the bidding group led by Chicago White Sox and Chicago Bulls owner Jerry Reinsdorf.
A hearing is tentatively scheduled for Monday afternoon in Phoenix for Judge Redfield T. Baum to hear arguments about delaying or even cancelling Wednesday's sale.
Ice Edge Holdings LLC, a group of Canadian and American businessmen, filed a $150-million (all currency U.S.) offer for the Coyotes with the court yesterday and it included a request to postpone the sale until September. The group said it needs time to complete its due diligence, finish lease negotiations with Glendale, convince the Coyotes' major creditors to accept new terms and to find more investors.
Ice Edge and Reinsdorf, whose bid is for $148-million, are the only bidders who promise to keep the team in Glendale. Balsillie, the only other bidder, wants to move the Coyotes to Hamilton. The Ice Edge bid was quickly followed last night by filings from Moyes and Balsillie that said both the Reinsdorf and Ice Edge bids failed to meet the qualifications demanded by the court and should be rejected. They want the court to proceed directly to the auction planned for Sept. 10, which is to consider bids for relocating the team if the Glendale bids were not accepted.
One of the oddest filings during the busy day was one from the NHL which appeared to object in part to Reinsdorf's bid, one which the league has been championing for months. In its filing, the league objected to proposed settlement amounts for various contracts owed to NHL and people or companies connected to it.
However, the filing was made to ensure the league's rights were protected because negotiations with Reinsdorf have not been completed.
Balsillie, the co-CEO of Research In Motion, also filed a new version of his $212.5-million bid. The key difference in this one is that a provision that would have paid Coyotes head coach and minority owner Wayne Gretzky as much as $22.5-million was removed. Instead, all of the purchase price will be in cash with no designated amounts.
Like Moyes, Balsillie charged that neither Reinsdorf nor Ice Edge offered any cash for the creditors and their bids should not be considered by the court. His filing also accused NHL commissioner Gary Bettman of having a personal bias against him and that the league governors' rejection of him as a potential owner was a sham.
"It is clear to Mr. Balsillie that commissioner Bettman and a number of the governors have a personal grudge against Mr. Balsillie," the filing said, "and that the root of the problem is Mr. Balsillie making prudent business decisions, in each case within his contract terms, instead of spending vast amounts of money for an unprofitable team with no right to apply for relocation."
The court document went on to say Balsillie believes his rejection by the NHL was connected to a last-minute dispute in 2006 over his right to move the Pittsburgh Penguins that caused him to withdraw an offer for the team.
As for the league approving Reinsdorf as an owner and not him, Balsillie's filing said, "It is telling that the NHL conditionally approved the Reinsdorf transfer application even though the individuals comprising the Reinsdorf group have not been determined. It appears to PSE [the company Balsillie formed to handle the sale]that the outcome of the NHL's deliberations was scripted to advance the NHL's objectives in relation to matters before the court."
Daryl Jones, one of the leaders of Ice Edge, said his group's offer differs from Reinsdorf's in three key areas. Ice Edge is offering to modify Gretzky's employment contract where as Reinsdorf has excluded Gretzky's contract from his bid. Ice Edge will also pay off more secured creditors - including Moyes - Jones said. And the group has pledged to cover the costs of winding down the Coyotes once the Chapter 11 process is over. While Jones declined to provide an estimate for how much that could cost, it typically runs into the millions.
"This is another positive step forward for us," he said. "Our constraint has always been time and with this we're sending a real signal to the court that we're serious."
Another condition of the Ice Edge offer is that Glendale agrees to allow up to five regular-season and additional NHL playoff games to be played elsewhere. The group hopes to receive NHL approval to play those games in Saskatoon.
The Coyotes' largest creditor, meanwhile, broke its silence yesterday. SOF Investments Ltd., a fund owned by computer tycoon Michael Dell and that is owed at least $80-million by the Coyotes, also filed an objection to Wednesday's sale.
Lawyers for SOF joined Moyes and Balsillie in saying neither bid consists of any cash but only the assumption of debt and a condition that new deals be worked out with some creditors while others would be left out in the cold. Both Moyes and Balsillie pointed out neither bid put up a $10-million deposit by yesterday, which was part of the court's terms.
The SOF filing noted that only Balsillie's offer would pay the investment fund in full. However, SOF also reserved its right to accept a bid from Reinsdorf or Ice Edge if an acceptable deal could be made.
Also joining the fray was AEG, the company owned by Los Angeles Kings owner Philip Anschutz, and the Goldwater Institute, a conservative watchdog group that may sue Glendale if it feels too much money is given away in lease concessions.
AEG, which has the contract to manage Jobing.com Arena, objected to Wednesday's sale because of a dispute with Reinsdorf over how much money AEG is owed. The Goldwater Institute, which lost a bid in another court yesterday to make public all of the arena lease negotiations, asked the judge to keep the interests of Glendale taxpayers in mind concerning the Reinsdorf and Ice Edge bids.
With a report from Paul Waldie