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Thursday, September 17, 2009
Owner seeks emergency hearing

Associated Press

PHOENIX -- Beleaguered Phoenix Coyotes owner Jerry Moyes has asked a federal bankruptcy judge for an emergency hearing to order the NHL to mediate the "key sale issues" in the complicated case.

The request was made Thursday in U.S. Bankruptcy Court by the attorneys who filed for Chapter 11 protection on behalf of Moyes on May 5.

The proposal came as Judge Redfield T. Baum considers whether to award the team to the NHL or to Canadian billionaire James Balsillie, who would move the team as soon as possible to Hamilton, Ontario, over the vehement objection of the league.

The filing says the NHL rejected mediation in an e-mail to Moyes' attorneys on Wednesday.

"Considering the amount of fees associated with continued disputes in this court regarding the sale process and what could be a protracted appellate process [depending on how the court rules], the debtors believe that a good-faith effort to arrive at a mediated resolution of the Key Sale Issues would be in all parties' interest," the Moyes filing said.

Baum has said in court that he would love the sides to come together but doubted after everything he had heard and read that such an agreement was possible.

The "key issues" listed in the Moyes filing are the ones most contested by the NHL -- the transfer of ownership to Balsillie, the timing and feasibility of relocating the franchise to Hamilton and the amount of relocation fee to be charged by the league.

The NHL board of governors voted 26-0 against Balsillie as an owner, labeling him untrustworthy. The Canadian, co-CEO of Research in Motion -- the company that makes the Blackberry, has failed in previous attempts to buy the Pittsburgh Penguins and Nashville Predators.

The league agrees that Hamilton is a thriving hockey market and says the city would be considered for expansion. But the NHL says Balsillie and Moyes concocted a scheme to get the team to Hamilton through a "side door" rather than follow the league's rules.

The Moyes filing wants the judge to compel the league to attend a session before San Francisco-based mediator Antonio Piazza.

On Tuesday night, the Glendale City Council rejected Balsillie's offer of $50 million if the city would drop its objection to the franchise's move. Instead, the council reaffirmed its support of the NHL offer.

Moyes showed up at the council meeting and wanted to speak in support of the Balsillie proposal, but Mayor Elaine Scruggs and city officials would not let him talk and asked him to leave.

"The city of Glendale would be better off without hockey," Moyes told The Arizona Republic outside the council chambers. He said that if the NHL wins the bid, "The team is going to be gone in a year."

Baum took the case under advisement after two days of hearings last week. He only said that his ruling would come before the regular season starts in early October.

The NHL's bid got a boost when the creditors committee and the lead secured creditor, SOF Investments, backed the league offer in court.

The NHL says it would look to quickly resell the team outside the bankruptcy process, but the league's deputy commissioner Bill Daly has said a new lease agreement with Glendale needs to be reached by the end of the calendar year for that to happen. NHL officials have indicated the two groups that pulled out of the bidding -- one headed by Chicago sports mogul Jerry Reinsdorf and the other known as Ice Edge Holdings -- would be interested in buying the team and keeping it Arizona.

The team has lost at least $30 million each of the last three seasons and more than $300 million since moving from Winnipeg in 1996.

If a local buyer can't be found, the NHL would look to relocate the franchise.

The NHL's $140 million offer would pay everyone in full except Moyes and Coyotes coach Wayne Gretzky, whose $22.5 million claim is being challenged in court. The NHL bid leaves about $13.5 million that could be available to Moyes and Gretzky. The league's offer also would reduce a claim the NHL has against Moyes from $30 million to $15 million.

Moyes, founder of Swift Transportation, could get up to about $100 million under Balsillie's offer, but that would take an unprecedented ruling overriding the NHL's authority to determine who owns its teams and where they play.

Although Gretzky remains listed as the team's coach, he has not shown up for training camp or the team's first preseason games. The NHL's bid rejects Gretzky's $8 million contract. He would have to negotiate a new deal if the league buys the team and wants him to remain as coach.