Phoenix bankruptcy/ownership Part XV - SITREP: SNAFU

[Gump Hasek]

Territorial Rights fees paid?

That was my point. Let us now disclose those fees and adjust them for inflation, and have Balsillie pay a similar amount. Now I know he has stated a want to not pay them, but that is likely just a tactic.

Of course having the NHL disclose a fair and equitable fee would require the NHL to play fair and to show a willingness to negotiate with Balsillie, which of course they haven't of late.

Balsillie's bid(s) to date have surely been representative of a starting point for discussion only; no buyer wishes to disclose full price in the infancy of negotiations, full price is arrived at via interplay between buyer and seller.

I hope the end result of the pending court dates somehow forces the NHL's hand to negotiate openly with Balsillie and to arrive at a settlement that pays cash to the creditors, something he has willingly offered to do to this point.

 

[CGG]

Let me remind you Hamilton folks one last time - you had your chance in the early nineties with expansion, and you didn't even rate serious consideration. Other than shedding some population (like any industrial town in the past 20 years) and having a favorite son with deep pockets, what's changed since then?

False. It is widely believed that the Hamilton bid was by far the best one in everyone's eyes but the NHL's when Ottawa and (inexplicably) Tampa were awarded franchises prior to 1992-93. You're confusing another round of expansion where Hamilton did not cobble together an acceptable bid.

 

[New User Name]

Esposito is an idiot if he thinks Hamilton is not a good place to put it. The 09-10 season tickets are already sold out for Hamilton because they started selling them. And tell me when was the last time Phoenix sold out? And how isn't Copps Colliseum a good arena, it already fits 17,000 people and with $250M it would fit $20,000.

when did Jim start selling tickets?

 

[CGG]

JB's offer does exactly that (leave the estate with the lease issue).

Yes, but you would have to agree that at least with JB's offer there's some money in the estate to cover a portion of Glendale's claim (along with that of Moyes). In the NHL's bid, Glendale will receive something very close to $0 if and when the NHL moves the team to KC.

 

[New User Name]

JB's offer does exactly that (leave the estate with the lease issue).

Should we not hold the NHL to a higher level?

 

[Grabovski]

when did Jim start selling tickets?

I don't know, I heard it on the news that they started selling tickets and they were sold out first day! And this was like a month ago I heard it.

 

[Jarqui]

False. It is widely believed that the Hamilton bid was by far the best one in everyone's eyes but the NHL's when Ottawa and (inexplicably) Tampa were awarded franchises prior to 1992-93. You're confusing another round of expansion where Hamilton did not cobble together an acceptable bid.

It wasn't exactly inexplicable. Hamilton had the rink, pre-ticket sales, corporate sponsorship and the ownership all sorted out and looking quite good. But at the time, Tampa looked like they could help the NHL's efforts for a good US broadcasting deal while Hamilton was felt to be detrimental to that cause.

New York vs Tampa OR
New York vs Hamilton (New York vs who? in the eyes of the US fan)

That was a significant problem for Hamilton at the time. I'm not saying it was "right" but it was an explanation that had some merit vs "inexplicably". Harold Ballard had died just a few months before and his estate was still being handle by executors so it's not straightforward how much the Leafs could be involved at the time. Harold had made 5 offers to Hamilton for indemnities during the 80s.

 

[LadyStanley]

I'm gonna cut to the chase instead of wading through these posts.

I heard/read that Baum might rule today whether if JB can own the team despite the NHL's vote.

Yes?
No?
Maybe?

If so, I'm guessing it'll be in the afternoon (since I'm on the East Coast.)

-I'm gonna get around to reading the last 10 pages or so in this thread in about 15 mintues. (Just trying to prove I'm not that lazy.)

The last of 12 items on the agenda (per court calendar) appears to be whether Balsillie will be allowed to participate in 9/10 auction.

There are another 14k posts prior to this thread you might want to catch up on as well.

 

[David Singleton]

Somewhat misrepresenting things...

It seems the NHL agrees with the characterization that it was Leipold that scutteled the deal. From the NHL's filing yesterday:

http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_863_0.pdf

From the above (in order):

As Mr. Leipold testified, he was selling the Club as a "franchise that could potentially be moved if the City did not cure a default provision that we planned to initiate." (Leipold Dep. at 79.) Consequently, the term sheet eventually executed between the parties on May 15, 2007, included neither of Mr. Rodier's suggestions (nor any other term) to account for the risk that Mr. Balsillie may be unable to relocate the Predators to Hamilton. Instead, it outlined nothing more than an ownership transfer of the team in Nashville under its existing lease. (Term Sheet (May 15, 2007), Leipold Decl. Ex. B; Balsillie Dep. at 166-69; Rodier Dep. at 137-41.)

Based on Mr. Balsillie's representations to Mr. Leipold and the NHL that he was committed to purchase the Predators in Nashville on a "where is, as is" basis and attempt in good faith to make the team successful in Nashville, Mr. Leipold exercised his right to make the term sheet binding and announced the deal publicly. (Leipold Dep. at 154-55.)

3. Mr. Balsillie Backtracks From His Commitments Following Announcement of the Transaction​

Mr. Balsillie refused to deposit the $10 million fee that would have given the parties a binding agreement. (Leipold Decl. Ex. A at II.F & G; Leipold Dep. at 154-55.)

a little later...

Mr. Leipold met with Mr. Balsillie on June 4, 2007, in Waterloo, Ontario, in an attempt to work out these issues and save the transaction. (Balsillie Dep. at 181; Leipold Dep. at 173-75.) At this meeting, however, it became increasingly clear that Mr. Balsillie would be unwilling to abide by these commitments or the applicable NHL rules and procedures. (Leipold Dep. at 173-75)

later yet...

Mr. Leipold continued to request that Mr. Balsillie put the deposit in escrow and make the term sheet binding, but Mr. Balsillie pressed for a new agreement to shift the risk with respect to any cure by Nashville under the lease and NHL consent to relocation to Mr. Leipold. (Leipold Decl. Ex. A at II.F-G; Leipold Dep. at 230) Frustrated by Mr. Balsillie's divergence from the representations and commitments on which the transaction had been based (and which had been embodied in the Term Sheet Mr. Leipold telephoned Mr. Rodier on June 10, 2007, to inform him that the transaction would be abandoned.), (Leipold Decl Ex. A at III.C; Leipold Dep. at 175-76, 231-32.)

Firstly, it's annoying to have to retype that. It's equally annoying that the facts therein will fall on mostly deaf ears.

That said, it is entirely accurate (given the evidence within the full document linked above, from which I've highlighted certain pieces, and its references to other documents) that Mr. Bettman and Mr. Leipold (especially) did everything possible within the rules of the NHL Constitution and By-Laws to make the sale happen to Mr. Balsillie.

It's also entirely accurate that Mr. Balsillie instigated the downfall of the transaction and resisted all efforts to save the transaction within the rules of the NHL Constitution and By-Laws.

 

[Gnashville]

I don't know, I heard it on the news that they started selling tickets and they were sold out first day! And this was like a month ago I heard it.

So that blows the whole affordable and available tickets out of the water if they are already sold. Guess the makeit30.ca crowd can start the "Southern Ontario can easily support another team" push if Saint Jim do no wrong wins.

 

[David Singleton]

That was my point. Let us now disclose those fees and adjust them for inflation, and have Balsillie pay a similar amount. Now I know he has stated a want to not pay them, but that is likely just a tactic.

Of course having the NHL disclose a fair and equitable fee would require the NHL to play fair and to show a willingness to negotiate with Balsillie, which of course they haven't of late.

Balsillie's bid(s) to date have surely been representative of a starting point for discussion only; no buyer wishes to disclose full price in the infancy of negotiations, full price is arrived at via interplay between buyer and seller.

I hope the end result of the pending court dates somehow forces the NHL's hand to negotiate openly with Balsillie and to arrive at a settlement that pays cash to the creditors, something he has willingly offered to do to this point.

Until a court overturns the NHL (or any other league's) ability to both choose with whom to do business and where to place a franchise, this is a moot point.

No city, group of fans, etc. has any say in the matter.

If Judge Baum chooses to set precedent and override that ability, so be it. There will obviously be legal fallout/ramifications.

There could potentially be so if he confirms the NHL's belief regarding their abilities.

Whatever.

Until ordered to do so, and allowing for legal wrangling over that order, there is no reason that the NHL should produce any numbers regarding the mythical (at this point in time) relocation to Hamilton- or any other potential destination. In fact, it would be legally unsound (in my layman's eyes) of the NHL to do that no matter how many fans/media people would like to see it.

Quite frankly, the NHL doesn't have to play fair with anyone. That said, if you would be kind enough to read the NHL's response in my previous post, you would see that they were quite willing to give him a second chance with the Nashville purchase. They met him halfway, all he had to do was meet the NHL halfway and play by the rules.

 

[GSC2k2*]

Esposito is an idiot if he thinks Hamilton is not a good place to put it. The 09-10 season tickets are already sold out for Hamilton because they started selling them. And tell me when was the last time Phoenix sold out? And how isn't Copps Colliseum a good arena, it already fits 17,000 people and with $250M it would fit $20,000.

Patently false, of course.

 

[jkrdevil]

It wasn't exactly inexplicable. Hamilton had the rink, pre-ticket sales, corporate sponsorship and the ownership all sorted out and looking quite good. But at the time, Tampa looked like they could help the NHL's efforts for a good US broadcasting deal while Hamilton was felt to be detrimental to that cause.

New York vs Tampa OR
New York vs Hamilton (New York vs who? in the eyes of the US fan)

That was a significant problem for Hamilton at the time. I'm not saying it was "right" but it was an explanation that had some merit vs "inexplicably". Harold Ballard had died just a few months before and his estate was still being handle by executors so it's not straightforward how much the Leafs could be involved at the time. Harold had made 5 offers to Hamilton for indemnities during the 80s.

If I've read about the 1991 expansion properly I believe Tampa was basically not chosen over Hamilton. There were two bids for a team in the Tampa area, Esposito's group and Karmanos and Rutherford's group for a team to play in the nearby Suncoast Dome/Thunder Dome/Tropicana field in St. Petersburg, FL. The favorites in the expansion were St. Pete and Hamilton. What seemed inexplicable was that Espo's group was chosen over Karmanos, especially considering within a year the Lightning ended up in St. Pete for a couple of years.

I think the big factor was the NHL wanted a promise of money up front. Basically as I understand it Ottawa was chosen over Hamilton and Espo's Tampa group was chosen over Karmanos' group for a team in the same area.

 

[Jarqui]

http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_863_0.pdf

From the above (in order):

a little later...

later yet...

Firstly, it's annoying to have to retype that. It's equally annoying that the facts therein will fall on mostly deaf ears.

That said, it is entirely accurate (given the evidence within the full document linked above, from which I've highlighted certain pieces, and its references to other documents) that Mr. Bettman and Mr. Leipold (especially) did everything possible within the rules of the NHL Constitution and By-Laws to make the sale happen to Mr. Balsillie.

It's also entirely accurate that Mr. Balsillie instigated the downfall of the transaction and resisted all efforts to save the transaction within the rules of the NHL Constitution and By-Laws.

Also worth noting that a room full of people witnessed Leipold trying to get the signed term sheet implemented on June 4th. But Rodier insisted on this "new" deal Balsillie wanted that back peddled out of the agreed upon term sheet. When Leipold wouldn't go for the new deal is when Rodier threatened the Canada Competiton Bureau and personal liability if he didn't. Again, the NHL have witnesses to that.

Secondly, as above, Leipold phoned Balsillie/Rodier to terminate the deal on June 10th. The NHL has provided copies of emails sent to Balsillie warning him not to put Hamilton Preds tickets on sale as Balsillie had emailed he was going to do the following day - after he'd been told the deal was dead. The NHL warned that Balsillie would devalue/destabilize the Preds and that Balsillie risked the BoG not ever approving him if he went forward. But Balsillie ignored the warning and went ahead selling Hamilton Predator tickets. Now he's whining about why they won't approve him.

 

[Space Herpe]

The last of 12 items on the agenda (per court calendar) appears to be whether Balsillie will be allowed to participate in 9/10 auction.

There are another 14k posts prior to this thread you might want to catch up on as well.

I've read them all!

I have to go back and find where the last post I read yesterday was...and then start from there...

This thread goes too damn fast.

 

[GSC2k2*]

The NHL keeps trumpeting their bid as "unconditional", which is a farce as well. One gigantic condition is Moyes somehow agreeing or being forced by the court to support it, which seems like a stretch as it involves un-bankrupting a currently-bankrupt entity for the benefit of the NHL only, and almost assuredly leads to another bankruptcy in less than a year, only this time there would be zero assets for the Arena Management company and a gigantic $700 million claim from Glendale.

Clearly you do not understand the NHL bid.

In short, the team does not go out of bankruptcy, nor consequently does it go back into bankruptcy..

 

[Jarqui]

If I've read about the 1991 expansion properly I believe Tampa was basically not chosen over Hamilton. There were two bids for a team in the Tampa area, Esposito's group and Karmanos and Rutherford's group for a team to play in the nearby Suncoast Dome/Thunder Dome/Tropicana field in St. Petersburg, FL. The favorites in the expansion were St. Pete and Hamilton. What seemed inexplicable was that Espo's group was chosen over Karmanos, especially considering within a year the Lightning ended up in St. Pete for a couple of years.

I think the big factor was the NHL wanted a promise of money up front. Basically as I understand it Ottawa was chosen over Hamilton and Espo's Tampa group was chosen over Karmanos' group for a team in the same area.

You're right as I recall in that the two teams who put $50 mil down got the expansion franchises. In fairness to Hamilton, they hadn't worked out indemnities with the Leafs & Sabres so they weren't certain of when they'd pay all of it though they did have a schedule for paying the $50 mil - something loosely to that effect.

 

[GSC2k2*]

Yes, but you would have to agree that at least with JB's offer there's some money in the estate to cover a portion of Glendale's claim (along with that of Moyes). In the NHL's bid, Glendale will receive something very close to $0 if and when the NHL moves the team to KC.

The estate would receive three things:

1. $2 million;

2. The 20% share of proceeds if the league sells the team (not counting relo fees);

3. The chance for the City to reach agreement with some of the other bidders who are still working and/or want to work with the city but who arguably have been thwarted by the process (one for sure in Ice Edge and another likely in Reinsdorf, who did not indicate no more interest but simply announced that they had not been able to finalize a deal in time).

Value that as you will.

 

[GSC2k2*]

Also worth noting that a room full of people witnessed Leipold trying to get the signed term sheet implemented on June 4th. But Rodier insisted on this "new" deal Balsillie wanted that back peddled out of the agreed upon term sheet. When Leipold wouldn't go for the new deal is when Rodier threatened the Canada Competiton Bureau and personal liability if he didn't. Again, the NHL have witnesses to that.

Secondly, as above, Leipold phoned Balsillie/Rodier to terminate the deal on June 10th. The NHL has provided copies of emails sent to Balsillie warning him not to put Hamilton Preds tickets on sale as Balsillie had emailed he was going to do the following day - after he'd been told the deal was dead. The NHL warned that Balsillie would devalue/destabilize the Preds and that Balsillie risked the BoG not ever approving him if he went forward. But Balsillie ignored the warning and went ahead selling Hamilton Predator tickets. Now he's whining about why they won't approve him.

Leduc, where is that one in the filings? I would like to read that (I have been getting behind).

 

[LadyStanley]

HKYFN reports court is in session

And:
Solerno up first going over legal issues to follow. Motion to allow transfer notwithstanding NHL refusal

 

[lillypad33]

You're right as I recall in that the two teams who put $50 mil down got the expansion franchises. In fairness to Hamilton, they hadn't worked out indemnities with the Leafs & Sabres so they weren't certain of when they'd pay all of it though they did have a schedule for paying the $50 mil - something loosely to that effect.

Yes,
And the Sens went bankrupt and couldn't pay the full 50 million....

 

[GSC2k2*]

On the subject of Jim and the Pens I believe that if Jim wanted to move them (had he bought them) there was a clause that forced him to sell them to the NHL if he wanted to relocate them.
I could be wrong, but if I'm not, so much for a 7 year clause.

The call option was in lieu of the 7 year requirement, IIRC.

 

[LadyStanley]

HKYFN:
He states that Ballsille, Moyes, Bettman and Daly are here and available to answer any additional questions. Judge asks for Objections none

 

[CGG]

The estate would receive three things:

1. $2 million;

2. The 20% share of proceeds if the league sells the team (not counting relo fees);

3. The chance for the City to reach agreement with some of the other bidders who are still working and/or want to work with the city but who arguably have been thwarted by the process (one for sure in Ice Edge and another likely in Reinsdorf, who did not indicate no more interest but simply announced that they had not been able to finalize a deal in time).

Value that as you will.

I value that at $2 million, to be paid roughly 9 months from now. What reason does the court have to value it at anything different?

 

[LadyStanley]

http://hfboards.com/showthread.php?t=677215

Next thread. Continue on.