Judge Says NHL Entitled To ‘Fee’ If Coyotes Move
11/06/2009 05:35
PHOENIX -- The future of the Phoenix Coyotes appears to rest on how much the NHL would charge Jim Balsillie for the right to relocate the insolvent team to Hamilton, and whether the Canadian billionaire is willing to ante up US$100 million or more to do it.
Judge Redfield T. Baum said during a riveting and often combative bankruptcy court hearing Tuesday that he believes the NHL has a right to demand payment for its territorial rights in Hamilton, and suggested he might force the league to establish a price by granting the motion to relocate the Coyotes in order to settle the bitter standoff.
When a lawyer for the NHL said there wasn't enough time to set the figure before a proposed June 22 auction date for the team if it's allowed to move, Baum warned "you may be forced to do that on a very expedited basis," and added later, "if that means this is over, it might be better for everyone."
Baum intends to consider the matter overnight "before letting everyone know sometime" Wednesday on how he wants the sides to proceed.
The amount is crucial for several reasons, as earlier in the day Balsillie lawyer Susan Freeman told the court her client would walk away if the fee was too exorbitant, something Richard Rodier confirmed on the courthouse steps once the proceedings had ended.
"I don't know if he would necessarily pay any (fee)," said Rodier, a Balsillie representative. "I did have a brief discussion with Jim about it this morning and the contract gives us the right to walk away if there's any transfer fee at all."
Should Balsillie walk away from a third attempt to buy an NHL team with his $212.5 million offer for the Coyotes, conditional on a move to Hamilton and closing by month's end, the other myriad thorny legal issues before Baum would not need to be solved since if not paid by the buyer, the relocation fee would leave too little money for the creditors.
And under that scenario, it appears the NHL would get its wish for a Sept. 10 auction for the club, with at least one more Coyotes season in Phoenix.
Freeman said she expects the NHL to demand $100 million as a relocation fee -- a number the league hasn't confirmed and that was blacked out in court documents -- and deputy commissioner Bill Daly refused to speculate afterwards on how much would be enough.
"I don't think we are prepared to put out a number," Daly told reporters. "That's something that is generally determined by the board of governors in the context of a relocation application and from our perspective, we have a couple of steps before we get to a relocation application."
Yet the figure emerged as the key issue after nearly seven gruelling hours of legal grappling over bankruptcy, antitrust, contract and commercial law. There appeared to be in excess of 40 lawyers either taking part or taking in the proceedings in courtroom No. 703, and when it was suggested the Coyotes don't have much value, Baum quipped that the more suits there were, the more something was worth, "and there are a lot of suits here today."
Baum was in many ways the star of the show, dropping witty one-liners and picking apart every single one of the many lawyers to argue before him. But his pointed questions and precise reasoning helped bring at least some of the other issues into focus.
He essentially dismissed the NHL's assertions of four expressions of interest from potential buyers interested in operating the Coyotes in Phoenix -- including Toronto Argonauts owners Howard Sokolowski and David Cynamon, and Chicago White Sox and Bulls owner Jerry Reinsdorf -- as little more than hearsay. He added there was only one real offer, that of Balsillie.
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Balsillie: Judge's ruling brings Coyotes move closer.
SWIVEL HIPS SAYS:
A $100 million ‘relocation fee’? That’s ludicrous. C’mon - this Judge Baum sounds like St. Albert City Council.