Phoenix XXIV: How many twists does the scriptwriter have left?

[Niagara67]

You do also realize that two of the finest lawfirms in Arizona have both issued opinions that it is not a subsidy? Look up Snell & Wilmer and Fennemore Craig and see if their creditials hold any merit in your eyes. And, by issueing an opinion to support the sale of the bonds, those firms actually demonstrated a willingness to put the necks on the line if their opinions prove wrong.

Johnnie Cochran was also a fine lawyer ... and we all know about his most famous case.

 

[AllByDesign]

Fugu, we can flap our gums (fingers) all day about the business aspects of the deal to no avail. I have asked countless times from those who state the value of both the parking or the team sale price can be supported with any real figures. They cannot. The question keeps getting deferred to the constitutional law and what can be argued in court. While this deal may be getting unwound with the threat of litigation, the reality at the end of the day is that the business model is extremely flawed.

I do not relish any eventuality that leads to the fan base experiencing an exodus. I also would have to go through the tragedy of informing my little girl why she won't be going to 40 Moose games a year. Emotions aside, there is never any excuse for bad business or tax layers propping up bad business.

We come here to discuss the merits of business transactions that occur in a sport we love. I have been very dissapoited that the business aspects of this transaction have gone by the wayside. Granted, the legal aspects have been educational and eye opening, they are not everything.

 

[kdb209]

There "may" be a gray area about the parking rights, per GWI's admission.

I thought we cleared that up two Roman Numerals ago

The CoG is purchasing these rights as part of the arena lease....that means the rights are currently held by.....who? As we sit here right now...Hulsizer doesn't own the team.....who right now as of this very second owns the rights to parking at the arena??

Costello: And you know who owns the parking rights?
Abbott: Yes.
Costello: Well then who owns the parking rights?
Abbott: Yes.
Costello: I mean the fellow's name.
Abbott: Who.
Costello: The guy with the parking rights.
Abbott: Who.
Costello: The parking guy.
Abbott: Who.
Costello: The guy ...
Abbott: Who owns the parking rights!
Costello: I'm asking YOU who owns the parking rights.
Abbott: That's the man's name.
Costello: That's who's name?
Abbott: Yes.
Costello: Well go ahead and tell me.
Abbott: That's it.
Costello: That's who?
Abbott: Yes.
PAUSE
Costello: Look, you got someone with the parking rights?
Abbott: Certainly.
Costello: Who owns the rights?
Abbott: That's right.
Costello: When CoG pays $100M to buy the rights, who gets the money?
Abbott: Every dollar of it.
...

 

[Niagara67]

And yet not a single poster, the above one included, has done a whit of analysis to demonstrate that it is a subsidy.

The other day, the prime argument was "everyone knows ...", followed by the far sturdier "Everyone DOES know ...". We now have a substantial rhetorical upgrade to "of that there is no doubt".

Awesome.

Indirect evidence : If it isn't a subsidy then why the h*** doesn't MH decide to keep the parking rights in order to save this deal? Wouldn't that be a simple solution? What's that? He doesn't have the money to buy the team? I see, so he needs a subsidy. Thank you for playing.

 

[Faltorvo]

Fugu, we can flap our gums (fingers) all day about the business aspects of the deal to no avail. I have asked countless times from those who state the value of both the parking or the team sale price can be supported with any real figures. They cannot. The question keeps getting deferred to the constitutional law and what can be argued in court. While this deal may be getting unwound with the threat of litigation, the reality at the end of the day is that the business model is extremely flawed.

I do not relish any eventuality that leads to the fan base experiencing an exodus. I also would have to go through the tragedy of informing my little girl why she won't be going to 40 Moose games a year. Emotions aside, there is never any excuse for bad business or tax layers propping up bad business.

We come here to discuss the merits of business transactions that occur in a sport we love. I have been very dissapoited that the business aspects of this transaction have gone by the wayside. Granted, the legal aspects have been educational and eye opening, they are not everything.

Well the business debate is dead because we crunched the #s some time ago and most sane folks have made the conclusion that the #s don't add up.

Now it's up to the snakes to see how the rest of the chess game is played.

 

[Confucius]

I thought we cleared that up two Roman Numerals ago

Excellent, don't know how I missed it the 1st time.

 

[goyotes]

I'm no lawyer, but the fact that even Hulsizer is on record as stating the CoG didn't release the documents in a timely manner and the admission that 400 pages were released last Friday probably doesn't play into CoG favour. Especially when they have a court order to do so. Scrugs stating that GWI has all documents regarding the sale for months isn't true and inaccurate comments such as these aren't a positive. I really don't think the CoG councillors are going to want everything that went on behind closed doors brought up to the public. Something a lawsuit likely would do.

Not sure who to believe about this "documents" controversy. I've been in them myself. The other side of the coin is Clint Bolick supposedly told the CoG two months ago that he didn't need anything further from the City to understand and analyze this transaction. The GWI didn't respond to that allegation which makes me think perhaps it might be true. Now, put aside your position on relocation for a moment. Let's get to the meat of the matter. Do you believe that the GWI has lacked the necessary documents to figure out if the CoG owns the right to charge for parking. Seriously? The documents have been available since the Coyote's bankruptcy.

In every piece of litigation, you always want the otherside's documentation, and especially after you indicate the threat of litigation. I don't blame the GWI for making a continuing request for documents. But I think the issue will be, can the GWI explain the delay in it reaching an opinion on the legality of the transaction, even to this very day. Given the mountains of information publically available for weeks, I find it difficult to understand how anyone can truly believe this is a matter of the GWI operating with the good faith need for more information.

I hear people respond to my tortious interference argument by claiming that the GWI never said the deal was illegal or unconstitutional. Then I hear people argue that the GWI has decided that the deal is unconstitutional. I can only tell you that from what I observe here in Phoenix, IMO the public is beginning to scratch their heads at what the GWI is doing, and most people are questioning why the GWI is not taking any action. Frankly, public interest groups are held to a higher standard than what may be the very kind of gamesmenship that the GWI is supposed to stand against.

I don't know whether the CoG has concerns about the deal seeing the light of day through litigation. Maybe they have serious concerns. Perhaps the GWI has serious concerns that the public will see their tactic as a four corner drill. Since neither of us know the answer, nor do either of us know whether the CoG has recently (I mean the last several weeks) worked in good faith to provide the GWI will all the information they requested, we can speculate how we wish.

 

[Coach]

You do also realize that two of the finest lawfirms in Arizona have both issued opinions that it is not a subsidy? Look up Snell & Wilmer and Fennemore Craig and see if their creditials hold any merit in your eyes. And, by issueing an opinion to support the sale of the bonds, those firms actually demonstrated a willingness to put the necks on the line if their opinions prove wrong.

So CoG gave these parties all the documentation on the deal to make this analysis but never bothered to give the same to GWI. That was smart.

 

[goyotes]

Johnnie Cochran was also a fine lawyer ... and we all know about his most famous case.

Believe what you wish. The firms and its lawyers are well respected.

 

[goyotes]

So CoG gave these parties all the documentation on the deal to make this analysis but never bothered to give the same to GWI. That was smart.

Your question assumes a premise which may be false. The GWI claims they requested more documents. Please direct me to a statement from the GWI that says they lack the "necessary" documents to analyze the deal. The GWI has been very careful to claim they have requested more documentation. Frankly, you can always ask for more documents, especially if documents are being created on a going forward basis. Perhaps I missed it, but I have seen nothing that states the GWI lacks the documents necessary to evaluate and understand the transaction. In fact, their statements suggest they have what they need to reach a conclusion as they now reference the threat of "protracted" litigation.

So, either they have what they need to take a legal position, or that is just more sabre rattling.

 

[LeftCoast]

Stick a fork in me Jerry, I'm done!!

 

[Coach]

My opinion. The GWI is wrong on the question of whether the transaction violates the Gift Clause. The GWI knows at a minimum this is a close call. The GWI has not sued thus far, but may sue if and when the deal closes. The CoG may close this deal. If it does, it will only be if the CoG agrees to an inflated bond interest rate, or the GWI backs down. If the CoG has to sell the bonds at an inflated interest rate, they will blame the GWI. If the GWI sues to void the transaction after the close, IMO, the CoG will countersue for damages, the measure of which is what the bonds should have sold for absent the threat of litigation, versus what the bonds actually sold for.

That, I think, is a very real scenerio assuming the GWI doesn't back down, and the CoG goes ahead with this transaction. I also think the Mayor did a pretty good job of explaining their belief that the GWI is causing damages. Heck, the CoG wouldn't even necessarily need to sue. I'm sure a taxpayer could fashion some remedy against the GWI if they believe the GWI caused harm. And, I think the Mayor went so very public to get the attention of the Board, since the GWI staff shot down the Mayor's request for her to meet with the Board (maybe at the Board's direction, I really claim to have no idea from whom the direction came).

Was I clear?

Wow, this is a big change for you. For month's you posted page after page after page after page how GWI would never ever ever ever sue.

 

[aj8000]

I don't think in that direction - I think backwards. Trust me, I know it's a handicap.

If the arrangement with CoG isn't a subsidy, then the free market should be able to replicate the funding arrangement, within a small degree of variance. Since it can't do that, by definition there is "something" in the arrangement with CoG that constitutes a subsidy.

In specific practical terms, it means the NHL (or a third party paying the NHL for the privilege) should be able and willing to take CoG's place in this deal. That nobody is willing to do so without an explicit taxpayer backstop says to me this is a subsidy, by definition.

That may be separate from a legal sense of subsidy, and it's completely separate from the question of "should" or "shouldn't" do it.

I agree with your analysis. If it is not a subsidy, then MH should be able to go to a financial institution with all the parking studies and get a 100 million dollar loan to purchase the Yotes.

Why doesn't he do this? Because he can't? Not to mention the fact he would have to personally guarantee the loan as well.

 

[CGG]

Not sure who to believe about this "documents" controversy. I've been in them myself. The other side of the coin is Clint Bolick supposedly told the CoG two months ago that he didn't need anything further from the City to understand and analyze this transaction. The GWI didn't respond to that allegation which makes me think perhaps it might be true.

Link please?

Now, put aside your position on relocation for a moment. Let's get to the meat of the matter. Do you believe that the GWI has lacked the necessary documents to figure out if the CoG owns the right to charge for parking. Seriously? The documents have been available since the Coyote's bankruptcy.

So who's lying when MH said the city dragged their heels, the city said the dropped off a box at Goldwater's place last week, and Goldwater says they now have to sift through another 400 documents that were just delivered? I guess all of them are lying? Don't you want to actually look at all the available documentation before launching a lawsuit? Usually? Especially when the legal agreement you are objecting to is still a moving target?

In every piece of litigation, you always want the otherside's documentation, and especially after you indicate the threat of litigation. I don't blame the GWI for making a continuing request for documents. But I think the issue will be, can the GWI explain the delay in it reaching an opinion on the legality of the transaction, even to this very day. Given the mountains of information publically available for weeks, I find it difficult to understand how anyone can truly believe this is a matter of the GWI operating with the good faith need for more information.

What makes you think GWI will have to one day explain their delay in acting or not acting? Who do they have to answer to? Sure the city wants them to do something, but they don't seem to care right now, and can't be compelled to act (or not act) by anyone.

I noticed this is at least the second time you've accused GWI of not acting "in good faith" or "above board". I don't think that's the case, but you see how their counterparty (COG) has acted all along. Why not scold them too? If there's anyone acting "below board" it's the COG thank you very much. This is the first time the act of not filing a lawsuit has been declared "acting in bad faith".

I can only tell you that from what I observe here in Phoenix, IMO the public is beginning to scratch their heads at what the GWI is doing, and most people are questioning why the GWI is not taking any action. Frankly, public interest groups are held to a higher standard than what may be the very kind of gamesmenship that the GWI is supposed to stand against.

I don't know whether the CoG has concerns about the deal seeing the light of day through litigation. Maybe they have serious concerns. Perhaps the GWI has serious concerns that the public will see their tactic as a four corner drill.

I think the bolded above is still nothing but your wishful thinking that there will be some kind of public groundswell to take down the evil GWI and make them do something, or promise that they won't do something. You can see what you want to see. Just like you see a tortious interference lawsuit coming. I'm sure there are quite a plenty of Glendale taxpayers who fully support the GWI on this issue. It's nothing but the hockey fans and the COG that want GWI to "back off".

 

[Dado]

Why doesn't he do this?

I really wish someone would ask him that direct question.

The guy is a derivatives trader and runs an asset management company. He has a contact file of unbelievable wealth. If he can't powerpoint the numbers in such a way as to get someone to finance him, there is something seriously fiscally askew about the deal.

Again, that is a *business* perspective. Legally and "should we do it"-ly are separate issues.

 

[Jarqui]

I agree with your analysis. If it is not a subsidy, then MH should be able to go to a financial institution with all the parking studies and get a 100 million dollar loan to purchase the Yotes.

Why doesn't he do this? Because he can't? Not to mention the fact he would have to personally guarantee the loan as well.

I've been out of the discussion for a while so I apologize in advance if I've missed something.

As I've loosely gathered, the gist of the purpose for money Hilsizer is getting is for the guarantee to stay 30 years and for operating the arena - stuff like that. Why should he borrow money to pay himself? Am I missing something with that question?

 

[Fugu]

Fugu, we can flap our gums (fingers) all day about the business aspects of the deal to no avail. I have asked countless times from those who state the value of both the parking or the team sale price can be supported with any real figures. They cannot. The question keeps getting deferred to the constitutional law and what can be argued in court. While this deal may be getting unwound with the threat of litigation, the reality at the end of the day is that the business model is extremely flawed.

I do not relish any eventuality that leads to the fan base experiencing an exodus. I also would have to go through the tragedy of informing my little girl why she won't be going to 40 Moose games a year. Emotions aside, there is never any excuse for bad business or tax layers propping up bad business.

We come here to discuss the merits of business transactions that occur in a sport we love. I have been very disapointed that the business aspects of this transaction have gone by the wayside. Granted, the legal aspects have been educational and eye opening, they are not everything.

To channel Shakespeare, can we just ban all the lawyers?


I can't add anything, AD. I've never seen another case where the value of any of the pieces doesn't quite add up to the sum of the parts-- yet the sum is quite handsome

I thought we cleared that up two Roman Numerals ago

Yup, sorry about that.

 

[Confucius]

What's the chances the NHL wants to be stuck holding the team for a couple of more years while GW and the city fight this out in court?

 

[Fidel Astro]

Personally, I hope GWI continues to do absolutely nothing between now and when the deal eventually falls apart. It's a great strategy. The CoG is starting to freak out, screaming "just ****ing SUE us already!", and GWI is just sitting around, biding its time.

 

[Confucius]

Personally, I hope GWI continues to do absolutely nothing between now and when the deal eventually falls apart. It's a great strategy. The CoG is starting to freak out, screaming "just ****ing SUE us already!", and GWI is just sitting around, biding its time.

Yep, that appears to be the plan.

 

[Dado]

If my life insurance agent wants to sell me some spanking new policy and sends me for a physical, but won't sell me insurance after the results come back, I don't need to see the medical report to know there's something wrong with me.

 

[billy blaze]

Not sure who to believe about this "documents" controversy. I've been in them myself. The other side of the coin is Clint Bolick supposedly told the CoG two months ago that he didn't need anything further from the City to understand and analyze this transaction. The GWI didn't respond to that allegation which makes me think perhaps it might be true. Now, put aside your position on relocation for a moment. Let's get to the meat of the matter. Do you believe that the GWI has lacked the necessary documents to figure out if the CoG owns the right to charge for parking. Seriously? The documents have been available since the Coyote's bankruptcy.

In every piece of litigation, you always want the otherside's documentation, and especially after you indicate the threat of litigation. I don't blame the GWI for making a continuing request for documents. But I think the issue will be, can the GWI explain the delay in it reaching an opinion on the legality of the transaction, even to this very day. Given the mountains of information publically available for weeks, I find it difficult to understand how anyone can truly believe this is a matter of the GWI operating with the good faith need for more information.

I hear people respond to my tortious interference argument by claiming that the GWI never said the deal was illegal or unconstitutional. Then I hear people argue that the GWI has decided that the deal is unconstitutional. I can only tell you that from what I observe here in Phoenix, IMO the public is beginning to scratch their heads at what the GWI is doing, and most people are questioning why the GWI is not taking any action. Frankly, public interest groups are held to a higher standard than what may be the very kind of gamesmenship that the GWI is supposed to stand against.

I don't know whether the CoG has concerns about the deal seeing the light of day through litigation. Maybe they have serious concerns. Perhaps the GWI has serious concerns that the public will see their tactic as a four corner drill. Since neither of us know the answer, nor do either of us know whether the CoG has recently (I mean the last several weeks) worked in good faith to provide the GWI will all the information they requested, we can speculate how we wish.

I think GWI has been pretty consistent- Hulsizer has to pay, simple as that not COG- that's their stance if COG disagrees sell the bonds

 

[billy blaze]

Your question assumes a premise which may be false. The GWI claims they requested more documents. Please direct me to a statement from the GWI that says they lack the "necessary" documents to analyze the deal. The GWI has been very careful to claim they have requested more documentation. Frankly, you can always ask for more documents, especially if documents are being created on a going forward basis. Perhaps I missed it, but I have seen nothing that states the GWI lacks the documents necessary to evaluate and understand the transaction. In fact, their statements suggest they have what they need to reach a conclusion as they now reference the threat of "protracted" litigation.

So, either they have what they need to take a legal position, or that is just more sabre rattling.

ummm.....apparently they don't have to do anything or take a "legal" position, where ya been the last two weeks, GWI driving the train- off the tracks it looks to me

 

[Tommy Hawk]

If you read the statement of the Mayor, the tortious interference claim has already occurred by the GWI sending out letters to underwriters and financial institutional investors claiming that the deal may be unconstitutional and threating to sue. That is classic tortious interference. The only question in my mind is did the GWI's letters go right up to the line, or pass the line? Have they sufficently "hedged" their allegations? I don't think so, but I will admit it is a litigable issue.

Suing the GWI doesn't mean the deal is over unless the CoG sues to recover damages for the loss of the Coyotes. They could sell the bonds, and sue for the increased interest rate. In fact, if the GWI does sue after the bonds are sold, I am confident that the CoG will countersue for damages. I'm sure the CoG can could line up a parade of underwriters and institutional investors that will say under normal circumstances, without the threat of litigation by the GWI, the bonds would have sold at X interest rate (hard to not agree with this given Illinois selling $3 billion in bonds last week and their financial problems outweigh the CoG's). I'm sure the GWI will point to causation and say there were other factors related to the interest rate or ability to sell, but aside from maybe people on this board, I doubt the GWI has any chance of prevailing on that defense. The fact is, the bonds are not selling because of the threat of litigation. Potential buyers who were contacted from the GWI will very, very likely say it was the GWI's letter that chilled their interest in the bonds. I mean, for after all, the CoG isn't selling junk bonds. The credit rating after the much publicized downgrade is still Aa2, and this offering was A1. That is a high grade investment rating.

I did not think the new bond issue was rated. Also, the rating is not the only thing to consider. I do not think the investors are scared off by the lawsuit, they are scared off by the numbers. They have a subordinated claim to excise taxes in case the parking revenue does not cover the payments. They have also done their own number crunching and are most likely coming up short on the parking and have serious worries about the coverage by the excise taxes, which is why the other debt with a lower claim to the excise taxes was also downgraded. This is a very small issue and can easily be absorbed by an institutional investor.

Your question is one of causation. I think the CoG could show that the GWI's actions proximately caused an otherwise acceptable interest rate to become inflated. The CoG's position would be selling the bonds, even at a higher rate, mitigated against any damage of the team leaving. I don't think the CoG would have even a remote problem showing causation. The more difficult issue to prove is did the GWI do enough to actually cross the line by sending threating letters and making public comments about the legality of the transaction, to actually tortious interfere? I believe while Glendale used the term "potential" when discussing the unconstitutionality of the transaction and their intention to sue, they crossed the line and if their position on the legality of the transaction is ultimately shown to be wrong, the GWI is going to get drilled for significant damages that could bankrupt the organization. At a minimum, staff needs to tell the Board this is a possibility if every went against them.

Very difficult to prove as both sides will trot out their paid experts.

They threatened to sue to block the transaction. That is pretty much classic interference. If their position is right on the merits, obviously the GWI wins. If they are wrong, however, they get drilled. We will see how this plays out. I don't see the CoG, after all they have invested, just walking away for the GWI any more than you believe the GWI will walk away from this controversy.

As pointed out they did not threaten to sue to block the transaction.

Your question assumes a premise which may be false. The GWI claims they requested more documents. Please direct me to a statement from the GWI that says they lack the "necessary" documents to analyze the deal. The GWI has been very careful to claim they have requested more documentation. Frankly, you can always ask for more documents, especially if documents are being created on a going forward basis. Perhaps I missed it, but I have seen nothing that states the GWI lacks the documents necessary to evaluate and understand the transaction. In fact, their statements suggest they have what they need to reach a conclusion as they now reference the threat of "protracted" litigation.

So, either they have what they need to take a legal position, or that is just more sabre rattling.

GWI has been requesting documents and has the court ruling of non compliance by COG for 2 years. As you know, all law in interpretation. Perhaps they are asking for those closed door meeting notes. Unless you know what they asked for your statement is pure conjecture.

The transaction in its entirety, as stated by COG, is a complex transaction that GI didn't understand. This infers that there is documentation that is not available to the public that was used in their decisions and number crunching. They think that only they had the information to make the proper decision so there is no hope for us to have all the information either. Based upon the information presented and my analysis, the numbers do not add up. Is it a subsidy as defined by case and constitutional law? Not sure because it is open to whoever gets the case. GI thinks they may think they have a case. CoG doesn't. EOS.

 

[RR]

Plenty of NHL owners have done exactly that. There is an appropriate price for the team in this location. Why let Glendale make up for the NHL overpaying in this market? (And they overpaid for obvious reasons.)

I'd like to ask you why you're concerned about Hulsizer's money but I don't recall any level of sympathy for Moyes? He lost more money on operating the team than Hulsizer will even bring to the table.

Not sure how you got there from me commenting on a post that $70M wasn't "even the slightest bit of commitment to the market." Whether it's MH, RR, or Fugu putting $70M on the table, that's "significant" in my book.