Bankruptcy judge agrees to sale of Phoenix Coyotes to NHL

The Associated Press ~ staff The News
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PHOENIX - A federal bankruptcy judge has given his approval to the sale of the Phoenix Coyotes to the NHL.
Judge Redfield T. Baum agreed to sign the sale order on Monday after lawyers made minor modifications to the deal.
None of the changes significantly altered the NHL's agreement to pay about US$140 million to buy the team from owner Jerry Moyes.
The only party who didn't join in the agreement is former coach Wayne Gretzky, who owned a small portion of the team. However, Gretzky did not file a formal objection with the court.
The sale ends nearly six months of an often-bitter court battle pitting the NHL against Moyes and Canadian billionaire Jim Balsillie.
Moyes, founder of Swift Transportation, took the team into Chapter 11 bankruptcy on May 5, with a plan to sell the team to Balsillie, contingent on moving the franchise to Hamilton, Ontario. The move took the NHL by surprise and the league vowed to fight it to the end, accusing the owner and the Canadian of trying to circumvent the NHL's rules for who owns a team and where it plays.
Balsillie doggedly kept up the court fight until Baum rejected his bid on Sept. 30. Balsillie's offer grew to $242 million when he added $50 million in a failed attempt to get the city of Glendale to drop its opposition.
Baum threw out Balsillie's bid on the grounds he could not overrule the NHL board of governor's 26-0 vote rejecting the Canadian as an owner. The judge also rejected the NHL's offer, but left open the possibility the league could buy the team if it made alterations to its proposal.
In the end, Moyes decided a few million dollars was better than none and reached an agreement with the NHL. As part of the deal, the league will reduce the amount of money it says Moyes owes it from $30 million to $15 million.
The sale leaves about $11.6 million that could be divided among Moyes, Gretzky and Glendale, but that figure is expected to drop by a few million when attorneys' fees and other administrative costs are subtracted. It is expected to take several months to determine the exact payouts.
The NHL submitted an offer to the court at the last minute when it became apparent that Balsillie would be the only other bidder.
The league plans to resell the team, preferably to a buyer that would keep the team in Glendale. The city vehemently opposed Balsillie's bid.
NHL deputy commissioner Bill Daly says any new buyer would have to get a reworked lease agreement with the city.
Under the purchase agreement, all the unsecured creditors would be paid except Moyes, Gretzky and Glendale. The largest secured creditor, SOF Investments, will get all of its $80 million, either in cash or over time in an agreement with the NHL.
Gretzky, who resigned as coach, says he is owed about $8 million, mostly in deferred salary.
The amount of money available to Moyes and Gretzky was dwindling because the league continued to fund the club, with that cost coming out of the purchase agreement.
Moyes has contended that the NHL never will succeed in the desert, but the league says the team can succeed with a better product on the ice. The Coyotes are off to a good start this season, but crowds at Jobing.com Arena have been sparse.
Ice Edge, formed by a group of investors from the United States and Canada, says it still is interested in buying the team. The owners of the CFL's Toronto Argonauts, Howard Sokolowski and David Cynamon, also reportedly have interest in purchasing the team.
14:56ET 02-11-09

Organizations: NHL, Phoenix Coyotes, Swift Transportation NHL board CFL Toronto Argonauts

Geographic location: Glendale, PHOENIX, Ontario United States Canada

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