CHICAGO (Reuters) - The owner of the Phoenix Coyotes disputes the viability of a bid by sports tycoon Jerry Reinsdorf to buy the bankrupt National Hockey League team.
The bid filed by Reinsdorf, a part-time Arizona resident who owns the Chicago White Sox baseball and Chicago Bulls basketball teams, “cannot be approved as a matter of law,” and “there are no qualified bidders” based on criteria set by the court, according to motions filed on Thursday by Thomas Salerno, the attorney for Coyotes owner Jerry Moyes.
Also on Thursday, the city of Glendale, a Phoenix suburb where the Coyotes play, and the National Hockey League each asked Judge Redfield Baum to delay the August 5 auction for bidders who want to keep the money-losing team in Arizona.
The city and league both argued that the potential bidders need more time to finalize their offers.
The Coyotes filed for bankruptcy in May, and Moyes said he had a deal to sell the club for $212.5 million to Research in Motion Ltd co-CEO Jim Balsillie, who wants to move the team to southern Ontario in Canada.
The NHL has resisted the team’s relocation, saying it can succeed in Arizona. Reinsdorf has bid up to $148 million for the Coyotes, while another group, Ice Edge Holdings, has offered up to $150 million in a letter of intent. Both groups have stated they would keep the team in Arizona.
The filings by Moyes, Glendale and the NHL came a day after NHL owners rejected Balsillie’s ownership application, approved Reinsdorf‘s, and said Ice Edge’s was “incomplete” but that it could continue efforts to finalize its bid.
On Friday, Ice Edge filed a purchase agreement, but also asked for more time to conduct further due diligence, arrange its financing and negotiate with Glendale officials.
Glendale requested the auction be postponed to early or mid-September. The NHL and Ice Edge asked the judge to shift the date to September 10, which is currently reserved for a second auction open to bidders who could move the team if the court deemed the initial round of bids inadequate.
Glendale said it is close to agreements with Reinsdorf and Ice Edge that would allow the Coyotes to remain in Jobing.com Arena in Glendale with “strong economic essentials and support from all necessary constituencies.” No details on those talks were provided in the filing.
Moyes’ attorneys said in a Friday filing the Reinsdorf and Ice Edge offers do not meet court requirements and the auction should be opened to those who may want to move the team.
Balsillie’s attorneys in a Friday filing asked the court to direct the NHL to come up with a relocation fee in case the team is moved by August 15.
However, the NHL said Thursday that Balsillie is no longer a “viable purchaser” of the Coyotes and any possible relocation of the team could not occur until after the 2009-2010 season.
The NHL said in its filing that Balsillie has repeatedly “turned his back on commitments ... he made” and acted in “disregard to established league rules,” causing “significant damage to the league.” The NHL also said Balsillie indicated in a meeting with owners Wednesday that he would legally challenge any decision not to approve his ownership application.
Balsillie’s spokesman said after the decision Wednesday that the onus is on the NHL to prove his client is no longer a viable owner after previously approving him in 1996.
In Friday’s filing, his attorneys called the NHL interview of Balsillie a “hostile interrogation.” They asked the court to weigh in on the NHL’s decision to not approve Balsillie’s ownership application.
Reporting by Ben Klayman; editing by John Wallace and Dean Yates