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

[goyotes]

Well..um, you see...uh, a group called Goldwater has done such an analysis, and concluded that it is indeed a subsidy.

http://sports.nationalpost.com/2011/03/03/goldwater-calls-scruggs-on-coyotes-blame-game/

I'll take their word for it over [mod edit] you.

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.

 

[GSC2k2*]

I'll repost what I've said in these threads several times previously. Corporations and governments most often announce bad news late on Friday afternoons in an attempt to beat the weekday news cycle; the theory being that many of the journalists are by that time gone for the weekend and as such the story receives less intense immediate examination.

I think that theory may well have been applicable prior to the days of 24/7 cable news programs and an internet full of home bloggers that regurgitate information. That said, bad news still seems to be announced regularly on late Fridays. Dreger said Jet fans would know their immediate fate as early as next week IIRC. This afternoon perhaps!

FYI, bad news is often scheduled to be released on Friday afternoon, but not because journalists are gone for the weekend. That has never been the case.

That tactic is taken because the rationale is that readers/viewers are not as attentive to the news on the weekend as they are during the week.

It has nothing to do with journalists' hours of work.

 

[wpgJetsfan]

Has anyone seen the BIG promo add on the AZ Republic website?

It says 3 Coyote Tickets for $49. That's like $16 per ticket. No wonder this team is losing 40-45 million this season.

 

[CasualFan]

I have heard many interpretations of the Mayor's "press conference" yesterday. Very likely because I am a litigator, the impression I got is that aside from the limited PR value, the Mayor was setting up the City's case for a tortious interference claim AND a D & O claim against the GWI Board. She asked for direct access to the Board, and was denied by the GWI staff (which is unusual since staff always takes direction from the Board in any organization). By going public through both the broadcast and print media (her own op ed piece in the AzRep), I view this as a clear shot across the bow not only to the GWI, but also a threat to the Board that they will be named in any suit.

In follow-up statements, the CoG did not rule out selling the bonds at a higher interest rate, nor has the CoG ever said the bonds cannot be sold under any circumstance. I'm not sure whether the CoG will "double down" and sell the bonds at an inflated interest rate, but clearly the Mayor has set forth two "damages" the City will likely claim as a direct result of the GWI's actions. Under scenerio one, the City will claim $500,000,000 in damages due to the loss of the Coyotes. Under scenerio two, the City will claim $100,000,000 in damages because of an inflated interest rate.

We can debate the strength of the City's cause (and I'm sure we will), but I speculate that the GWI has been put on notice of the City's claim, and now the Board of Directors can also determine for themselves that they will likely be named in a lawsuit as well. That may, or may not, get their attention and staff may, or may not, be getting some calls asking exactly what the strategy is with the current "four corners drill".

May I clarify that your opinion?

Goldwater is nothing more than a PR Firm and they never had any intention of filing a complaint against Glendale.

Glendale, on the other hand, is making preparations to file a tortious interference claim against Goldwater.

Did I get that correct?

 

[GSC2k2*]

Well..um, you see...uh, a group called Goldwater has done such an analysis, and concluded that it is indeed a subsidy.

http://sports.nationalpost.com/2011/03/03/goldwater-calls-scruggs-on-coyotes-blame-game/

I'll take their word for it over [mod edit] you.

Well, the problem is as follows:

1. GWI has not done an analysis, as evidenced by their own words. They claim to not have sufficient documentation and are demanding it to complete an analysis.

2. GWI has never, EVER, even once concluded that it is a subsidy.

 

[GSC2k2*]

I think its cute that people from outside of Canada think Toronto media cares about Winnipeg getting a team one way or the other. Even so much so that they'll skew their reporting. Trust me. Toronto media couldn't care less about Winnipeg.

I know there is a tendency towards a persecution complex in Western Canada, but don't kid yourself. Toronto media cares plenty about Western Canadian page views and ad clicks.

 

[goyotes]

May I clarify that your opinion?

Goldwater is nothing more than a PR Firm and they never had any intention of filing a complaint against Glendale.

Glendale, on the other hand, is making preparations to file a tortious interference claim against Goldwater.

Did I get that correct?

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?

 

[GSC2k2*]

Whether it's a subsidy in a "legally punishable in Arizona" kind of way, may still be a matter of conjecture, although CoG's continued public whining strongly suggests it is.

But whether it's a subsidy in a meat-and-potatoes practicality of running a business sense - of that there is no doubt, it's a subsidy, and a hefty one at that.

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.

 

[CGG]

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.

They did no such thing. They informed anyone interested that they were "still conducting an investigation" and "a final decision has not been made", and that issuing bons "raises serious questions as to whether the transaction violates the gift clause". And "If the Institute were to initiate litigation on this bases and prevail..."

Show me where it states they believe the transaction is in fact illegal and are threatening to block the transaction. They did no such thing.

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.

Legal opinions with 12 pages of disclaimers based largely on numbers that they themselves did not produce but for their purposes are assuming to be correct. Just like they were paid to do. Not too meaningful, I must say. Had they commissioned studies themselves and crunched the numbers and still had the same conclusion, then I'd be slightly impressed.

 

[CasualFan]

It is absolutely absurd to think that COG will successfully sue Goldwater for $100 million or $500 million.

It's more absurd to think the city would even contemplate trying to. If Glendale files the claim indicated, I will shred my law degree and go sell bead jewelry at the airport.

 

[CGG]

Mod: deleted.

Well, the problem is as follows:

1. GWI has not done an analysis, as evidenced by their own words. They claim to not have sufficient documentation and are demanding it to complete an analysis.

2. GWI has never, EVER, even once concluded that it is a subsidy.

And yet these guys who have never even said it's a subsidy is getting all the blame heaped on them, is the only reason the deal hasn't closed yet, and will be sued for tortious interference to the tune of up to $510 million?

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.

I don't think anyone has ever suggested it isn't a subsidy in the practical sense. To that end, yes, everyone does know it. The proof is in the genesis of the deal - MH needed $100 million to close the gap between what he was willing to pay ($70 million) and the asking price ($170 million, numbers not exact). With that in their pocket, the COG set out to try to explain how giving MH $100 million would not be viewed as a subsidy in the legal sense, allowing them to possibly close the deal.

Now, had MH suddenly come up with the brilliant idea to sell parking rights, separate from his brilliant idea of buying the team for $170 million, shopped around and found the COG was the highest bidder at exactly $100 million, then it wouldn't be a subsidy.

And if the COG tendered a contract to manage the arena in a competitive basis, and the very lowest bid was MH at $97 million over 5.5 years, then that wouldn't be a subsidy either.

Dating back to the Reinsdorf deal, even before the Moyes bankruptcy, he needed subsidies to keep the team there and Beasley promised he could deliver up to $20 million a year. Then through the Reinsdorf MOU and the Ice Edge guys, subsidies are prevalent again.

All the leaglese on whether the Arizona law will / would / could define this MH deal as a subsidy is secondary, and of lesser importance to some.

 

[CasualFan]

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?

Very clear, thank you.

I disagree with your assessment to such a level that replying would serve no purpose. And I reserve all of my purposeless discussions for GSC.

 

[ATHF]

Does anyone notice that the Burnside column says that the COG and GWI are in contact about the deal, yet Scruggs was just complaining yesterday about the GWI refusing to meet with them?

It looks like somebody isn't quite telling the truth in this situation and it will be interesting to find out who it is.

That's not even mentioning that it's more likely that the contact that Burnside is referring to is the same contact that Rose has been conducting on behalf of the COG since they hired her....

 

[HamiltonFan]

Well, the problem is as follows:

1. GWI has not done an analysis, as evidenced by their own words. They claim to not have sufficient documentation and are demanding it to complete an analysis.

2. GWI has never, EVER, even once concluded that it is a subsidy.

From the article I quoted in my last post:

"Even if the team owns the parking rights, they must be worth the $100 million the City is paying. We believe the revenues will be insufficient to repay the debt. If they are insufficient or if the team fails, the taxpayers, not the purchaser, is liable. That is where we believe the deal should be restructured to avoid an illegal gift"

Put your lawyer spin on it all you want, but he's calling it a subsidy.

"We believe the revenues will be insufficient to repay the debt".

Pretty clear, I'd say.

[mod delete]

 

[Killion]

Whether it's a subsidy in a "legally punishable in Arizona" kind of way, may still be a matter of conjecture, although CoG's continued public whining strongly suggests it is.....But whether it's a subsidy in a meat-and-potatoes practicality of running a business sense - of that there is no doubt, it's a subsidy, and a hefty one at that.

I dont quite understand your point Dado as you seem to have reversed your position. GW is squawking that it is a subsidy because Glendale already owns the parking rights & therefore cannot transfer those rights without some form of monetary compensation from the Arena Manager, something that neither Moyes nor Ellman were required to do. Assuming the COG's position is correct, and they can actually transfer the parking rights & then buy them back using funds from the bonding, securing the rights to charge &utilize the lots for advertising as well, I fail to see how this is a "subsidy" as it wont be reliant upon direct funding from the taxpayer. The market, the people who buy the bonds are the ones fronting the money. The "potential" that the taxpayer will be on the hook is obvious, however, the prospectus's from CBRE etc claim otherwise, as does Hulsizer (& Id guess the NHL) along with the COG.

So if we assume the COG's position is correct, again, where's the taxpayer subsidy in all of this, and I dont mean the "potential subsidies" should revenues fail to keep pace with the debt obligations?. If the COG charges ahead with the issuance at 7%+, well, Id consider that beyond reckless, but at 5-6%. Possible, maybe.....

 

[CasualFan]

Put your lawyer spin on it all you want, but he's calling it a subsidy.

Darcy is a she, not a he.

 

[Dado]

Sure, its distasteful to many, however, as you know, BC is open for business in that department & is raking in huge profits as a result.

Personally, I don't have as sharp a distinction between "public" and "private" business as (apparently) many others do. Mostly to me it's a continuum of options, not a black/white choice.

 

[PitbulI]

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.

If I know I'm guilty of something, If I have the money/pull, I can have any lawfirm say I'm innocent and fight till the last breath for me.

If COG does sue GWI, who will they go to for council? Either of these two "Finest" law firms?

The fact is. GWI is saying this deal is illegal. Bond experts are not buying the bonds because perhaps they've had their "Finest" legal experts deem this to be too risky. But hey, what do all those people know. Only the law firms in Pheonix know best?

It's great to debate all these things but one thing is for certain. COG better sell those bonds and quick or there will be no Coyotes hockey this fall.

Also, when the courts get brought in. The NHL knows how long a legal process can take. You think they'll wait around while more southern franchises are in trouble and need their help or will they swallow their pride and move the team back to hockey country?

 

[Dado]

I dont quite understand your point Dado as you seem to have reversed your position.

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.

 

[RECCE]

I know there is a tendency towards a persecution complex in Western Canada, but don't kid yourself. Toronto media cares plenty about Western Canadian page views and ad clicks.

You couldn't have just agreed, could you...

 

[pucka lucka]

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.

How deep was their analysis? What were the caveats of their opinion? I am not sure why intentionally ignoring all the facts is acceptable here.

 

[Killion]

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

Gotcha. We agree then, however, rather than calling it a "subsidy", I prefer to call it "creativity" founded in "wishful thinking". Kinda like an athlete or performer "visualizing". Forward. Ahead. Yesterdays' just a spent penny. Digg?...

"If your flying through the future & you see someone flying by you into the past, its probably best not to make eye contact"....
Jack Handey

 

[pirate94]

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.

Lawfirms are always willing to take a case regardless of the subject or outcome. why do you think lawyers often take the most outlandish civil suits?
just because a lawfirm thinks they have a case doesn't mean they have a chance, it just means they think they have a case.
Lawyers will often put their neck on the line for a prospective payday

 

[RECCE]

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.

Was this a public admission or just a private conversation between you and another colleague over a "working lunch" and a nice Chablis?

 

[Killion]

Lawyers will often put their neck on the line for a prospective payday

My experience with Litigation cry Lawyers in particular (US) would suggest otherwise pirate. Most are alomost clairvoyant in projecting outcome; the majority of cases settled out of court as a result. I consider that particular species of the profession the Great White's, to be avoided at all costs.... No interest in surfing Queensland thanks....