Peter Power/The Globe and Mail
While Jim Balsillie's camp celebrated yesterday because it is "back in" the game to buy the Phoenix Coyotes, the long-awaited rival bid from Jerry Reinsdorf became public as auction-sale dates for both bids were set by a bankruptcy court judge.
Judge Redfield T. Baum set a date of Aug. 5 for an auction for those interested in keeping the Coyotes in suburban Glendale, Ariz. A lawyer for Reinsdorf, who owns the Chicago White Sox of Major League Baseball and the Chicago Bulls of the NBA, told the court he plans to submit a bid for the team to the NHL by Friday. No details were given.
However, the judge also set a conditional date of Sept. 10 for a second auction if the first failed to produce a suitable new owner. The September auction will be open to bidders who wish to relocate the team. That will include Balsillie, the co-chief executive officer of Research In Motion, whose bid of $212.5-million (all currency U.S.) was rejected by Baum because it did not allow the NHL enough time to consider relocation issues. The bid was resubmitted last week and was conditional on moving the Coyotes to Hamilton.
"Fantastic news," Balsillie's lawyer, Richard Rodier, said in an e-mail after the decision was announced. "We're back!"
The Balsillie forces were happy because Baum told the NHL it must approve or disapprove relocation applications by Sept. 2, eight days before the sale. If the league rejects a bidder such as Balsillie, either he or Coyotes co-owner Jerry Moyes can ask the bankruptcy judge to review the decision.
However, Balsillie must first wait out the auction Aug. 5. No details of Reinsdorf's offer have been made public, but sources have said it consists of $130-million to satisfy some of the team's secured creditors and the assumption of other debt. It will also require a hefty contribution from the City of Glendale, possibly as much as $15-million to $20-million a year.
Reinsdorf has registered a company with the Arizona Corporations Commission that will buy the Coyotes. It is called Glendale Hockey LLC. Phoenix lawyer John Kaites, who is active in Republican Party politics, is listed as the managing partner.
A lawyer for Glendale objected to the Aug. 5 sale date, telling Baum it did not allow enough time for concessions on the arena lease and other financial assistance to be negotiated with Reinsdorf. The judge said the city council will have to hurry if it wants to keep the team because he wants a quick sale to see that the team's many creditors are paid as soon as possible.
Under the schedule established by the court, local bids will be due July 24 with objections and responses to objections to follow in the next 10 days with the sale in August. If none of the bids are deemed suitable, bids from those seeking to relocate the team have to be filed by Aug. 7, with the NHL to decide on the relocation applications by Sept. 2 and the sale on Sept. 10.
Reinsdorf's offer could be trouble for Balsillie. A Glendale lawyer told Baum the city likes the offer even though lease concessions have not been negotiated.
Balsillie agreed to an August auction, but still wants the sale to close by Sept. 15 in order for him to move the team for the start of the season. However, Balsillie did score a win when Baum pushed aside objections from the NHL's lawyers that it does not want to approve relocation for the 2009-10 season.
In a filing earlier in the day, lawyers for the NHL argued relocation cannot be done before the 2010-11 season. The league said it will cover the Coyotes' losses for the coming season "until a thorough and orderly process locates the highest and best relocation opportunity."
During the hearing, lawyers for Moyes asked the judge to order the NHL to mediate a relocation fee with Balsillie. But the judge suggested mediation will not be necessary until the team is sold.
The NHL has said there are three other expressions of interest from bidders interested in keeping the Coyotes in Glendale. One is from Coyotes minority owner John Breslow, another from Toronto Argonauts owners Howard Sokoloski and David Cynamon, and a third is from an unidentified Phoenix businessman. But all of those parties have yet to make an official bid.