The National Hockey League is expected to ask a U.S. Bankruptcy Court judge Thursday to dismiss a Chapter 11 filing by the Phoenix Coyotes.
The NHL took control of the team Tuesday after team owner Jerry
Moyes filed for bankruptcy protection on behalf of the Coyotes. Part of
that Chapter 11 filing calls for the hockey team to be sold for $213
million to a Canadian businessman who wants to move the team from
Glendale to Ontario, Canada.
The NHL and city of Glendale, where the Coyotes have a 30-year lease
to play at Jobing.com Arena, have opposed Moyes’ efforts to sell the
team to Research in Motion CEO Jim Balsillie.
NHL Deputy Commissioner Bill Daly said in a statement Tuesday that
the league would appear as the Coyotes owner in bankruptcy court.
Don Gaffney, a bankruptcy attorney for Snell & Wilmer LLP, said
if the NHL’s takeover of the team is legal then it could have standing
to ask for dismissal or changes in the filing. That could keep the team
in the Phoenix market.
NHL Commissioner Gary Bettman said the Coyotes should remain in
Arizona and questioned whether Moyes had the authority to file
bankruptcy and sell the team.
The league loaned money to the Phoenix Coyotes in February, a deal
that included provisions to take over the team if need be. Moyes and
the NHL have been looking for possible investors and new owners amid
the team’s financial troubles.
“This is about the league rules and the enforceability of our rules,
whether or not Mr. Moyes even had the authority to file a bankruptcy
petition is something we’re going to get into,” Bettman said in
statements on the league run Web site NHLcom. “This is more about the
tactic and I think a challenge to league rules than it is about
economic conditions of the club, which we believe, with new ownership
and with accommodations the city of Glendale is prepared to make, we
think can succeed.”
Squire Sanders & Dempsey LLP is representing Moyes in the
bankruptcy case. Squire Sanders attorney Tom Salerno could not
immediately be reached for comment. The bankruptcy filing gives the
federal bankruptcy court the power to decide whether the league or
Moyes owns the team, Gaffney said. Bankruptcy courts can undo lease
terms and could help Moyes avoid NHL restrictions on the team’s sale,
he said.
It also offers more latitude for sale of the team and the ability to
avoid a $750 million lease penalty, should the team be moved from
Glendale, according to officials familiar with the case.
The Coyotes moved to the Phoenix market in 1996 from Winnipeg.
Moyes would lose his $207 million equity stake in the team under the proposed sale, said Steve Roman, a spokesman for Moyes.