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From the Coyotes Bankruptcy Hearing: Relocation Auction? LIVE UPDATES!!!

June 9, 2009, 12:55 PM ET [ Comments]
Shawn Gates
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Update from inside the Phoenix Coyotes bankruptcy hearing:

The judge has apparently made a statement to the effect that in the case of the Raiders being re-located, compensation was provided to the NFL as the eventual market was worth more than the one it was leaving. He then states that since a franchise in Hamilton is worth more than one in Glendale, this should result in the buyer having to pay a relocation fee to the NHL.

Note that he HAS NOT made a judgement as of yet. This is just him making statements within the context of the hearing they’re having, but it certainly is interesting and indicates that he has at the very least bought into J Ball’s argument about where the franchise is worth more.

Update 1: Debtor will have to demonstrate that they will pay for the value of the franchise in the new location, not the value in the current one.

Update 2: Possible hearing on the 22nd to determine a relocation fee if necessary.

Update 3: Judge stating that district courts have stated that sports leagues have the ability to deviate from the constitution and bylaws

Update 4: Judge has asked Moyes and J Balls if they are going to request any changes to, or removal of, the issues of the bylaws/constituion they are disputing if the sale is allowed to proceed. They responded that they would not.

Update 5: Moyes lawyer trying to use an example of a case where a team had no buyers but the judge has pointed out that this is not applicable here.

Update 6: NHL now up to bat! Judge has asked them if they ALWAYS follow their constitution and bylaws. Response: They acknowledge the fact that situations will arise where the commissioner will have to make decisions based on unique situations.

Update 7: Judge has raised the issue of the Nordiques, stating that they did not file a relocation application in line with the constitution and bylaws. NHL's antitrust lawyer responds, stating that that particular situation was known about in advance and there had been a request to do things more quickly because of the situation

Update 8: NHL Lawyer: NHL constitution give commish the right to make decisions that are not reviewable.

Update 9: NHL is currently reviewing 5 ownership applications (doing background checks and the like). Committee meetings have been held with regards to the relocation application submitted by J Balls

Update 10: Judge not excited by expressions of interest. He says he wants offers...

Update 11: NHL stating they cannot approve relocation application in the timeline that J Ball's group has set up.

Update 12: NHL stating Moyes owned a franchise in Phoenix, giving him the right to apply for relocation but not to sell and relocate..

Update 13: Judge asks wether J Balls has been approved for ownership before. NHL says he was offered a consent agreement that he would not sign as there were policies and procedures he did not wish to follow.

Update 14: Case of a Mazda dealership in Florida being cited. Owner wanted to move it. Court sided with Mazda: Location must be OK'd by them.

Update 15: Judge commenting on tight time frame. NHL countering that this is the fault of J Balls as he did not want to follow the rules set out by the NHL

Update 16: Judge wants to know if it goes the NHL's way, what will happen to the creditors? NOTE: I am unsure whether the following is an NHL response, or judges question: "going over the actual value of Balsille's bid". Will update this when it's more clear to me...

Update 17: NHL saying that the court does not have the right to say who can own this team and where it can be placed. They state that they wioll find "qualified and interested" people and the judge will "conduct the action"

Update 18: NHL saying that if an auction to keep the team in Phoenix is insuccesful they will conduct a second auction including a relocation option...

Update 19: NHL saying because they will pay for the team to operate in hoenix for the 09-10 season there is no harm in delaying the process to "do it right" and to try and get the most value they can for the team.

Update 20: Judge shifting topic to NHL's claim that allowing bankruptcy + relocation going through would be "devastating to the league".

Update 21: Discussion around effect of having teams move without league consent.

Update 22: Judge does not seem to think that allowing teams to move without consent woud be a complete disaster for all of sports. Cites the cases of the Colts (NFL) and Clippers (NBA).

Update 23: NHL argues that if this case gives the impression that filing bankruptcy can allow individuals to avoid league policy then this will cause "a flood of filings".

Update 24: NHL Antitrust lawyer states that if there is a perception of an antitrust issue in this case it is because of the schedule J Balls has placed on the preceedings, whereby the NHL may not have enough time to exercise "due dilligence" on his applications.

Update 25: Judge criticizes J Balls lawyers for filing for footnotes, but praises their inclusion of a Seinfeld quote. Wow, the hearing has shifted into bizzarro world I guess!!

Update 26: Judge stating J Balls group should have filed an application
earlier than they did.

Update 27: J Balls lawyer comments on lack of sponsorships and ticket sales. Judge mentions fan letters and Save the Coyotes group, and allowing these individuals the opportunity to show their support.

Update 28: Judge stating that he needs to be sure that the NHL will not be financially harmed by the move. If it will, he will deny the motions. So Moyes and J Balls need to demionstrate that the NHL, the city of Glendale/Phoenix, etc... will not suffer financially as a result of a move.

Update 29: J Balls lawyer arguing the NHL does not have the right to charge a relocation fee as it's not documented how they would go about this. Judge saying they have the ability to do it in a reasonable and fair manner.

Update 30: Judge states if you want to force yourself into a location owned by the league you will have to pay (NOTE: I wonder if this might be the judge's way of getting the league the expansion fee they'd lose out on while also getting J Balls his team? Just a thought...)

Update 31: J Balls lawyer states if the relocation fee is not $0 they have the right to walk away. Judge stating a relocation fee needs to be determined before the 22nd as if it's too high it appears there will be no sale to Balsille.

Update 32: Judge states they're running into a calander problem as a result of J Balls imposed timeline. Judge unsure he's going to be able to do more than he's doing right now...

Update 33: J Ball's lawyers making arguments as to why this needs to be taken care of for good by June 30th...

Update 34: J Ball's lawyers arguing that it;'s acceptable to have the NHL speed up the vetting on the applications they've submitted. Judge not so sure given that this is the first time a bankrupt team has been sold and moved from the US to Canada. He feels the league probably has the right to do due dilligence on the applications.

Update 35: J Ball's lawyer arguing that she's convinced the NHL will block a relocation unless the court states that they can relocate. Judge is not convinced the NHL has it out for Balsille the way the lawyer states they do.

That's it from me folks! Hearing is ongoing until 12;40 local, break for lunch until 1:40, then back to wrap it up. I've got paying work to do now! See ya's later!

(Credit to Heather Schroeder who is posting updates from inside the courtroom)

Shawn Gates
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Twitter: ShawnHockeybuzz
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