Yesterday, Judge Redfield Baum of the US Bankruptcy Court rejected both offers to buy the bankrupt Phoenix Coyotes franchise. Following five months of negotiations and legal maneuvering which played out under intense media scrutiny, Baum decided neither Jim Balsillie or the NHL's bids could be approved:
"...the court can not approve the bids by PSE and the NHL. Therefore, PSE's bid is denied, with prejudice because the interests of the NHL can not be adequately protected as required by Section 363(e) if the sale to PSE were approved. The NHL's bid is denied, without prejudice. As stated above, the NHL can probably cure the deficit in its bid if it elects to make the required amendment(s)."The required amendments referenced in the decision are in regards to an ambiguous statement in the NHL's bid which may leave out former head coach Wayne Gretzky and owner Jerry Moyes:
"The evidence is that its bid is designed to allow payment of "all legitimate creditors". It may be that such statement is ambiguous because it could mean a payment of differing amounts to legitimate creditors or it could be payment of all legitimate creditors...On the surface, this ruling leaves the door open for the NHL to clean up it's bid to include Moyes and Gretzky and eventually get the team to do as they wish. You can download the full court decision here:
...It seems obvious to the court and the apparent practical effect of the NHL's bid is to pay all creditors in full except the Moyes and Gretzky claimants...
...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."
We'll continue to have additional legal insight on the developments in this proceeding in the coming days. Click here to read more of our coverage of the Coyotes bankruptcy throughout the summer.