Balsillie puts in $212.5 mil offer for the Coyotes

[Vic Rattlehead*]

If it's awarded in bankruptcy court, it doesn't seem that way.

They would have to approve relocation though.



Because he's relying on pressure from public opinion to push this through.


My question is why he so desperatly wants to prove that Souther Ontario is 'unserved.' I figured everyone is either a Red Wings, Sabres or Leafs fan for the most part.

It's a HUGE market, and there are a lot of people in the Hamilton/Kitchener-Waterloo area that want a franchise of their own.

 

[Ward Cornell]

My question is why he so desperatly wants to prove that Souther Ontario is 'unserved.' I figured everyone is either a Red Wings, Sabres or Leafs fan for the most part.

I wouldn't be to quick to make that assumption.
A lot of Leaf fans and some Red Wings fan (more from London and west to Detroit butI would say they are Original 6 fans first) with very very few Sabres fans.

 

[GKJ]

We'll have to see how it works out.


It could set a dangerous precedent.

 

[ej_pens]

If it's awarded in bankruptcy court, it doesn't seem that way.

If I remember correctly from the Pens bankruptcy, the NHL still had to approve the ownership change from the court.

 

[GKJ]

I wouldn't be to quick to make that assumption.
A lot of Leaf fans and some Red Wings fan (more from London and west to Detroit butI would say they are Original 6 fans first) with very very few Sabres fans.

Is there a drawing or something as to where exactly the territory radii for those three teams are?

 

[kdb209]

Question....if Balsillie has to pay a terrotorial rights fee to MLSE or the Sabres, does that money go into the revenue sharing plan?

No. Expansion fees or territorial indemnification fees are NOT included in HRR - the players get no cut from those revenues.

(b) Notwithstanding anything to the contrary in Section 50.1(a) above, HRR
shall not include the following non-exhaustive list of revenues:

...

(ii) Revenues from the relocation or sale of any existing Club (or any
interest therein) or the grant of any new franchise;​

 

[guyincognito]

Unless you have a copy of the NHL by-laws, you can't make this kind of statement. For all you know, the NHL has every right to revoke the franchise rights.

AFAIK, all that means is that the team is no longer in the NHL. It doesn't mean they actually own the team.

 

[GKJ]

If I remember correctly from the Pens bankruptcy, the NHL still had to approve the ownership change from the court.

Didn't the league take control of the team though? I may be wrong on that. Balsille had a deal in principle to buy the Penguins before it was blocked -- this when his intentions were less obvious.

 

[GSC2k2*]

The League was secured, but I don't think they are senior to other secured lenders, they are all in the same boat.

GS point about the worth of a southern on to the NHL is very interesting and worth discussing. The question though is how much would it cost the NHL to deal with the Phoenix situation without bankruptcy? Balsille's offer gives the equity holders 0 cents on the dollar, and probably gives some of the unsecured lenders a bit of a haircut. So I question if it would only cost the NHL $80 mil to get out of the Phoenix mess.

Thanks, Egil. Here is another little point to chew on.

After a cursory review of the documents between the NHL and the team filed in Maricopa County, there is a Secured Loan Agreement between the parties. Among the assets secured was the team's lease and arena management agreement.

Given that the NHL have some sharp cookies at the top (notwithstanding the laughably uninformed opinions of some hockey fans) and they have one of the world's elite law firms representing them (Skadden Arps), I expect that it is highly unlikely that the NHL would not have taken a security interest in the franchise, in addition to their revocation rights under the franchise agreement.

If such is the case, then the franchise would not even form part of the bankrupt estate. Before the judge gets to do what he needs to do, the secured creditors are entitled to realize upon their security.

EDIT: Egil, on your other point, they are senior to the other lenders. One of the documents filed is a subordination agreement that so provides.

 

[cdnhky1]

It would probably spell the end of Bettman

And it should. He should have been gone long ago.

Welcome to the NHL Jim. Where do I sign up for seasons tickets?

 

[Winger98]

I think the NHL will do whatever it can to keep Balsillie on the side lines and I don't blame them.

 

[optimus2861]

The NHL would have to approve him the legitimate owner for him to have a vote on the board of governors, or for him to have legitimate decision making powers, for the general manager he appoints to be allowed to enter into standard player contracts, or in fact, for the franchise to even continue to exist.

I would think the other owners, struggling or not, would think long and hard before going there. That opens a big can of worms labelled "Anti-Trust" that they probably don't want to deal with.

I can't recall a pro sports team going through this kind of bankruptcy sale process before, with the added wrinkle that the league does not like the prospective owner-to-be and may actively try to block him. Are there any past examples to draw on here, or is this breaking new ground?

 

[ej_pens]

Didn't the league take control of the team though? I may be wrong on that. Balsille had a deal in principle to buy the Penguins before it was blocked -- this when his intentions were less obvious.

That wasn't during bankruptcy. That was when Lemieux was trying to sell the team

 

[kdb209]

Thanks, Egil. Here is another little point to chew on.

After a cursory review of the documents between the NHL and the team filed in Maricopa County, there is a Secured Loan Agreement between the parties. Among the assets secured was the team's lease and arena management agreement.

Given that the NHL have some sharp cookies at the top (notwithstanding the laughably uninformed opinions of some hockey fans) and they have one of the world's elite law firms representing them (Skadden Arps), I expect that it is highly likely that the NHL would not have taken a security interest in the franchise, in addition to their revocation rights under the franchise agreement.

If such is the case, then the franchise would not even form part of the bankrupt estate. Before the judge gets to do what he needs to do, the secured creditors are entitled to realize upon their security.

EDIT: Egil, on your other point, they are senior to the other lenders. One of the documents filed is a subordination agreement that so provides.

Surely you meant "I expect that it is highly likely that the NHL would have taken a security interest in the franchise".

 

[btn]

lol, is he attempting to shoot himself in the head again? he should just lay low and let the process work through.

Because he can't help himself. This is just as much about him seeing his name in newspaper headlines, and on the nightly news, or being lauded as a Canadian patriot, than it is about making money.

There really is no other way to explain his prior bad behavior, especially when it came to his lies to the NHL BOG and the fans of Nashville in regards to his true intent for the Predators franchise.

 

[MountainHawk]

I would think the other owners, struggling or not, would think long and hard before going there. That opens a big can of worms labelled "Anti-Trust" that they probably don't want to deal with.

I can't recall a pro sports team going through this kind of bankruptcy sale process before, with the added wrinkle that the league does not like the prospective owner-to-be and may actively try to block him. Are there any past examples to draw on here, or is this breaking new ground?

Were the Blues in bankruptcy when the NHL blocked the sale to the owner that was going to move them to Saskatoon? I don't think so, but that's the only one I can think of where the NHL blocked a move.

Anti-trust is MUCH more of an issue blocking a relocation than an sale, IMO Canadian anti-trust is different, and would be involved here, but the US right to association would surely result in the NHL being legally allowed to block a sale. Is the Canadian law different enough, maybe, I'm not an expert on that. But in the meantime, the Coyotes would likely be off the ice for a season, and I guarantee you that the NHL bylaws allow the league to revoke a franchise if they fail to ice a team.

 

[GSC2k2*]

Surely you meant "I expect that it is highly likely that the NHL would have taken a security interest in the franchise".

Indeed I did. What a blunder on my part!! I have corrected my post, thanks.

 

[Wheels]

I am just surprised to see so many other bankruptcy/insolvency lawyers in this forum.

(Yes, I am one of said vultures - but without more than a basic working knowledge of the US Bankruptcy Code. Now, if a Canadian team went into bankruptcy or CCAA protection, I'd be all over that!)

 

[RangerBoy]

Or the judge for agreeing with it, assuming he does. Balsillie played this very well from a tactical standpoint, but if he does get his way it's going to be a very uncomfortable situation with the amount of bad blood between him and the league.

Assuming the likelihood of finding local ownership who can outbid Balsillie is as low as everyone seems to agree it is, about the best thing Bettman can hope for here is a Kansas City group getting their act together quickly enough to give the judge a viable alternative bid. Or maybe challenging the validity of Moyes filing Chapter 11, but I have no idea about the legalities of that.

The NHL in Kansas City is going to be a smash

Bettman needs to put his ego aside and do what is best for the NHL.

Bettman can not continue to prop up the Coyotes by giving more financial assistance than he has already given them.

Separated from birth

 

[cdnhky1]

maybe they can bring their pal "boots" back in to save the day

What is John Spanos up to these days? If boots doesn't have the money, perhaps Spanos does?

What a joke Bettman and the NHL are.

 

[guyincognito]

Were the Blues in bankruptcy when the NHL blocked the sale to the owner that was going to move them to Saskatoon? I don't think so, but that's the only one I can think of where the NHL blocked a move.

Anti-trust is MUCH more of an issue blocking a relocation than an sale, IMO Canadian anti-trust is different, and would be involved here, but the US right to association would surely result in the NHL being legally allowed to block a sale. Is the Canadian law different enough, maybe, I'm not an expert on that. But in the meantime, the Coyotes would likely be off the ice for a season, and I guarantee you that the NHL bylaws allow the league to revoke a franchise if they fail to ice a team.

And is that something the league *really* wants? A folded team and a dispersal draft? This isn't the Arena Football League. Sometimes you just have to say "nicely played, sir" and move on. If the end game is going to be JB or folding, they'd have to be idiotic to pick folding.

 

[guinness]

No matter the outcome, I think it's time for the NHL to admit that hockey has failed in the desert.

 

[Egil]

If such is the case, then the franchise would not even form part of the bankrupt estate. Before the judge gets to do what he needs to do, the secured creditors are entitled to realize upon their security.

Can you explain what this means (I have no idea right now).

EDIT: Egil, on your other point, they are senior to the other lenders. One of the documents filed is a subordination agreement that so provides.

So what extra rights in Bankruptcy does that give the NHL over the other secured creditors? This certainly seems like a bit of a mess, but I imagine that all the non-NHL, non city of Glendale creditors would be pushing for Balsille's offer (as it likely gets them the most money). Glendale is clearly near the bottom of the totem pole with their lease agreement, but how much influence will the NHL have?

 

[GSC2k2*]

I am just surprised to see so many other bankruptcy/insolvency lawyers in this forum.

(Yes, I am one of said vultures - but without more than a basic working knowledge of the US Bankruptcy Code. Now, if a Canadian team went into bankruptcy or CCAA protection, I'd be all over that!)

There are certainly a lot of pretend ones. My knowledge of US Chapter XI proceedings is more of just a working knowledge, like yours. That being said, there is a lot of commonality between the countries in terms of contract law pertaining to secured lending, an area in which I am much more versed.

 

[BigMac1212]

No matter the outcome, I think it's time for the NHL to admit that hockey has failed in the desert.

Then hockey shouldn't even exist.

I highly doubt that the NHL will give in to Balsile.