Phoenix Coyotes file for Bankruptcy; Bid to move team to Ontario

NEW YORK (AP) - Angered by the Phoenix Coyotes' bankruptcy
filing, the NHL stripped owner Jerry Moyes of the authority to run
the club.
A few hours after Moyes announced Tuesday that the team had
filed for Chapter 11 bankruptcy protection - a move that could
allow the cash-strapped franchise to be sold and moved to Ontario -
the NHL said it would represent the team in bankruptcy court.
"We have just become aware of today's bankruptcy court filing
purportedly made on behalf of the Phoenix Coyotes," NHL deputy
commissioner Bill Daly said in a statement. "We are investigating
the circumstances surrounding the petition, including the propriety
of its filing.
"We have removed Jerry Moyes from all positions of authority to
act for or on behalf of the club. The league will appear and
proceed before the bankruptcy court in the best interests of all of
the club's constituencies, including its fans in Arizona and the
league's 29 other member clubs."
Earlier, BlackBerry boss Jim Balsillie announced a plan to buy
the Coyotes and move them to Ontario.
The co-CEO of BlackBerry maker Research In Motion said that his
$212.5 million offer is conditional on the Coyotes relocating to
Canada, where they existed as the Winnipeg Jets before moving to
Phoenix for the 1996-97 season.
The team's Chapter 11 bankruptcy filing included the proposed
sale of the franchise to PSE Sports & Entertainment, LP, which
would move the franchise to southern Ontario.
"Extensive efforts have been undertaken to sell the team, or
attract additional investors, who would keep the team in
Glendale," Moyes, the Coyotes chief executive officer, said in a
statement announcing the Chapter 11 filing. "Creating a process
under the supervision of a judge assures that anyone wishing to
purchase the team will have the opportunity to bid.
"Likewise, the City of Glendale, which has been very
cooperative with efforts to keep the team in Glendale, will be able
to provide potential buyers assurances of the city's willingness to
offer incentives to keep the team as a tenant in the Jobing.com
arena, the lease for which is subject to rejection in bankruptcy.
The process assures that the identities of the new owner and the
team's location will be known by June 30, 2009, thus enabling the
NHL to include the team in its 2009-10 schedule."
There was confusion last week when the Glendale city manager
said the NHL was in charge of the team. Coyotes president Doug Moss
rejected that report.
Citing Glendale records, the Arizona Republic reported that the
Coyotes stopped paying rent to Glendale, parking fees and most of
its security costs at Jobing.com Arena in August. The paper also
said the city was paid nearly $351,000 for past rent on Feb. 25,
the day after the NHL agreed to loan the team an unspecified
amount.
As part of the loan agreement, the league had the right to take
over the franchise if the loan was not paid, the paper said.
Balsillie made a well-publicized attempt to purchase and move
the Nashville Predators to Hamilton in the spring of 2007. The deal
fell through, with speculation that some in the NHL did not like
Balsillie's insistence that the team be moved to Canada.
He also failed in a bid to buy the Pittsburgh Penguins.
"The current team ownership asked that I table an offer to
purchase the Coyotes and significant discussions resulted in an
offer that is in the best interests of the franchise, the NHL, and
the great hockey fans of Canada and Southern Ontario," Balsillie
said in a statement.
"I am excited to move closer to bringing an NHL franchise to
what I believe is one of the best unserved hockey markets in the
world - Southern Ontario. A market with devoted hockey fans, a rich
hockey history, a growing and diversified economy and a population
of more than seven million people," he said.
At the request of the Coyotes ownership, Balsillie said he has
also agreed to provide $17 million in financing to allow the
franchise to keep going in advance of the sale.
Balsillie's offer does not guarantee that the Coyotes will move.
"If others want to come in and there's an offer that is deemed
better by the courts, then ultimately that would be a court
decision," said Steve Roman, a spokesman for Moyes. "As I
understand it, the hope and the plan is that all of this would be
dealt with by June 30, 2009. You have a person who has a purchase
agreement, but at the same time there could be other players who
want to get involved."
In March, NHL commissioner Gary Bettman said the Coyotes were
actively seeking investors or possibly new ownership, but
reiterated that the team won't be relocated.
"Our goal is to bring in new capital and make this franchise
solvent," Bettman said on March 26. "That's our direction, and at
this point moving the franchise elsewhere is not on the table."