I am trying to think of the strategy COG is using when taking the course of action they took last night and I came up with 2 scenarios:
1. They have the judge in there pocket and know how he will rule. Crazy, but it is possible.
2. Maybe this was a "last stand", knowing the city is going to file BK anyway. If the Coyotes renegotiate, they can avoid BK, if not they are going BK anyway. If they are going BK, any damages the coyotes would be awarded, would likely be unsecured in a BK filing. In other words, the coyotes damages would be behind many other secured creditors. So the city has little risk of paying the coyotes any damages. When the COG is sued by the Coyotes, they can blame the coyotes for the BK all the way around.
When making a legal argument, you want to either have form or substance on your side, better to have both. In this case, the city has neither. The former city attorney was neither employed by the COG or "substantially" involved with the negotiation at the time of the lease negotiation and signing. The fact that they sent him an email and asked for his opinion does not mean he was an employee or substantially involved.
The damage done to the coyotes could be significant. Season ticket sales, advertisers, attracting UFA's, could all be dealt a major set back. In this respect, I know the deal was signed 2 years ago, and a deal is a deal, you have to honor a contract. I think the city misplayed there hand.
The city should have said to the coyotes, " we are considering BK as an option, to avoid BK, we would like to renegotiate the lease. We are also considering canceling the contract because we feel you might have violated the agreement". If we cancel the contract, think about the harm that would cause the coyotes. We know you will file a lawsuit if we cancel the contract, but so what, you will suffer damages, and we will file BK, so you won't ever be paid a damage award.
If the COG took that tactic, The coyotes ownership group would have to think longer and harder about renegotiating the lease. They wouldn't legally have to, but the COG would have had some leverage with the cancellation threat and all the repercussions. If the Coyotes ownership were told or knew the cancellation announcement was a possibility, they are dumb for not thinking about the repercussions of that vote last night. I don't think they knew. One or two of the council members wanted to delay the vote last night, and I think that would have been smarter because the coyotes could have thought about the repercussions and maybe, just maybe, they renegotiate.
I still think the COG misplayed their hand. Sorry for the long post/rant