Balsillie pulls out, Coyotes in limbo after judge’s ruling

The question of whether an NHL team in Hamilton would adversely affect the Toronto Maple Leafs may have to wait.

A Phoenix bankruptcy judge has turned down both the league’s bid for the struggling Coyotes as well as Jim Balsillie’s attempt to move the club in a decision published Wednesday.

Judge Redfield T. Baum denied Balsillie’s third attempt to secure a franchise because his relocation plan to Hamilton did not meet the requirements of the league.

“In the final analysis, the court cannot find or conclude that the interests of the NHL can be adequately protected if the Coyotes are moved to Hamilton without first having a final decision regarding the claimed rights of the NHL and the claims of the debtors and [Balsillie],” Baum wrote in his decision.

Balsille acknowledged in a statement he has given up his quest of owning the franchise.

“From the beginning, my attempt to relocate the Coyotes to Hamilton has been about Canadian hockey fans and Canadian hockey,” he said.

“It was a chance to realize a dream. All I wanted was a fair chance to bring a seventh NHL team to Canada, to serve the best unserved hockey fans in the world. I believe I got that chance.

“I respect the court’s decision, and I will not be putting forward an appeal.”

Though he is disappointed with the decision, Hamilton Mayor Fred Eisenberger, still believes the city will be home to an NHL team one day.

“The good news in it for Hamilton is that all have agreed that hockey in southern Ontario is viable and that it would be a successful market for them to start working with,” he said.

“We’ll continue to work to see if we can get an NHL franchise here for Hamilton.”

The league’s bid was rejected because the NHL would be able to choose the creditors who would be paid.

Besides former head coach Wayne Gretzky and owner Jerry Moyes, the league said it would pay all the creditors in full.

“There has been no determination that the Moyes and Gretzky claims are not ‘legitimate creditors.’

“It would be inherently unjust for this court to deprive them of their possible rightful share of any proceeds without first providing all involved a fair trial on their claims,” Baum said.

NHL not out of it

However, the judge didn’t rule the league out from bidding on the team in the future.

“It seems to the court that the defect in the NHL’s bid could be easily cured by the NHL,” Baum said.

“In hockey parlance, the court is passing the puck to the NHL who can decide to take another shot at the sale net or it can pass off the puck.”

Despite the rejected proposal, NHL deputy commissioner Bill Daly was happy with Judge Baum’s ruling.

“We are pleased that the Bankruptcy Court has confirmed the league’s rights to select its owners and the location of its franchises,” Daly said in a statement.

‘We are reviewing the opinion and considering how we can best address the court’s concerns regarding our offer to purchase the Coyotes.

“It remains our goal to secure the long-term stability of the Coyotes in Glendale.”

Bankruptcy started court fight

Moyes filed the Coyotes under Chapter 11 bankruptcy on May 5.

Balsillie, who had previously lost his attempts to purchase the Pittsburgh Penguins and Nashville Predators, decided to make an offer of $212.5-million US for the club.

As with his previous ventures, the co-CEO of Research In Motion had hopes of moving a franchise to southern Ontario, specifically the city of Hamilton, where the team would play out of Copps Coliseum.

The league had other plans for the franchise, saying they had been in control of the day-to-day operations of the club since November of 2008 and Moyes had no right to file the team under bankruptcy.

In May, Balsillie filed an application to the league’s Board of Governors but by late July, they had voted to reject the Waterloo resident as an owner 26-0.

Reinsdorf withdraws

During this time, the league began to support Chicago Bulls and Chicago White Sox owner Jerry Reinsdorf, but he withdrew his bid in early August.

Another bidder, Ice Edge Holdings then withdrew their bid of US $150-million on Sept. 8.

Despite ultimately offering US $242.5-million, $100 million more than the league’s offer, Balsillie was in a Phoenix bankruptcy courtroom on Sept. 23 for an emergency hearing where he conceded on one of his earlier demands.

Instead of attempting to move the team immediately, Balsillie said he would keep the club in Glendale for the remainder of the 2009-2010 season if his bid was chosen.

From 2004-2008, the Coyotes lost over $390 million US, including $117 million in 2007.

The team struggled on the ice last season, posting a 36-39-7 and a 13th place finish in the Western Conference. Phoenix has not made the playoffs since the 2001-2002 campaign.