Phoenix CIV: May be time to put the band back together ...

[Tom ServoMST3K]

IF IA is telling the financial truth, then they should be able to reduce the AMF payments a bit.

 

[Llama19]

IF IA is telling the financial truth, then they should be able to reduce the AMF payments a bit.

I'm glad you made that a BIG IF...

 

[Slashers98]

Relocation for this upcoming season isn't a realistic option. They stay and fight or negotiate a less turbulent exit, even if it incurs some losses.

It's only realistic if they announce it this week. After that, it's going to be too late.

 

[MNNumbers]

My gut tells me they will find a middle ground with a restructured contract during discovery.

Depends on how scorched earth Glendale feels.

IA really screwed themselves by asking to get rid of that ticket surcharge. It shows they were willing to only negotiate if they came out on top.

I am not sure about negotiations. It seems there is evidence that IA is cash strapped. Acceptable middle ground to COG might be a 5MM/yr AMF, with no surcharges. Problem is, of the court treasures the surcharges, it's no skin for IA to charge them. But, could they just raise prices to make up for it? I doubt that. IA stands to lose 10MM/yr if they renegotiate.

Surely that can't afford that

 

[goyotes]

I thought she might escrow the funds. Ordering the City to pay is a better result for the Coyotes than I expected. Increasing the bond to $1M isn't that big a deal. It ties up $1M in assets, but getting the cash is a lot more significant than the cost of the bond, or posting collateral.

Of course, on the merits, I don't think anyone should read anything in to this in terms of where the court may land. I think the judge is troubled there is no real case law on point (in her view) to guide her.

She could either go the route CF suggests that Tindall rewording the res. and ord. is prima facia substantial involvement, or she could go down the road of looking at the magnitude of the deal, and see Tindall and Frozoni on balance as "involved" but not "substantially" when put in context of the deal as a whole. She may also look at the issue of self-dealing, and not see that as really the case here, which could cause her to not find in the City's favor.

I will be interested whether she rules on what evidence is relevant. Based upon the strict reading of the statute, anything LeBlanc and Tindall talked about pre-IA may not be relevant since Tindall didn't go to work for IE or RSE, so on the face of the language of the statute, those dealings may not even be considered by the court.

I'm not going to handicap the outcome since I admit I don't know what all the evidence will show. I also don't have a real good sense of what the judge sees as the important issues and facts.

Waiver could be a wildcard, although I don't like IA's argument on that in light of the fact we are dealing with a statute, and not equitable or purely contractual rights.

 

[Ciao]

This was a very good job by IA to limit the damage. There was a very real risk that the entire payment, and all future payments, could have gone into escrow until the case is resolved.

By comparison, a one-time $1-million bond is a gift.

 

[Major4Boarding]

Not surprised. I thought escrow was the more likely outcome, but she's punting the inequity in the contract down to the actual trial-- if it happens. Pay through the current term, but give the city some protection. $1 MM bond is not insignificant, so she doesn't view Glendale's case as baseless.

In the same boat. Never thought the bond would be raised so I settled in to the Escrow camp.

Now my question becomes, can they negotiate now before the remaining $750K is deposited or no?

 

[Slot]

Interestingly, is judge saying Glendale would have canceled on June 12 without TRO, they shouldn't be completely liable for portion from June 12 to June 30? That is 18 days, which is 20% of the 90 days for the quarter. $750K is 20% of $3.75M, which is what IA's bond was increased by..

Good call. Judge is going straight down the middle so far. Looks like she's giving notice to both sides, tough but fair.

 

[objectiveposter]

so if this drags on in court for a long time will glendale have to keep making future payments? or will that be determined later on?

 

[Ciao]

I thought she might escrow the funds. Ordering the City to pay is a better result for the Coyotes than I expected. Increasing the bond to $1M isn't that big a deal. It ties up $1M in assets, but getting the cash is a lot more significant than the cost of the bond, or posting collateral.

Of course, on the merits, I don't think anyone should read anything in to this in terms of where the court may land. I think the judge is troubled there is no real case law on point (in her view) to guide her.

She could either go the route CF suggests that Tindall rewording the res. and ord. is prima facia substantial involvement, or she could go down the road of looking at the magnitude of the deal, and see Tindall and Frozoni on balance as "involved" but not "substantially" when put in context of the deal as a whole. She may also look at the issue of self-dealing, and not see that as really the case here, which could cause her to not find in the City's favor.

I will be interested whether she rules on what evidence is relevant. Based upon the strict reading of the statute, anything LeBlanc and Tindall talked about pre-IA may not be relevant since Tindall didn't go to work for IE or RSE, so on the face of the language of the statute, those dealings may not even be considered by the court.

I'm not going to handicap the outcome since I admit I don't know what all the evidence will show. I also don't have a real good sense of what the judge sees as the important issues and facts.

Waiver could be a wildcard, although I don't like IA's argument on that in light of the fact we are dealing with a statute, and not equitable or purely contractual rights.

I'm with you on most of this, goyotes.

It's pretty hard for judges to put equity off to to the side -- it just doesn't come easily to a superior court judge.

However, if Glendale clears that hurdle and convinces her to buy in to the statute (which I think is likely), then in my view the most likely outcome is that (i) Glendale gets to rescind retroactively to the date of its resolution or the court's TRO; (ii) is relieved from future payments after the date of recission; and (iii) if it's possible to calculate the amount, if any, that flowed through to Tindall and Frisoni to retroactively recover those amounts only.

The last step is probably a step too far for what's at stake, and I don't picture too many litigants going through the work necessary to bring that issue to judgment.

I could see Glendale eventually being let out of this contract, though. It will be a bit of a dog's breakfast getting there -- if the NHL doesn't throw IA overboard and pull-up stakes first.

 

[Ciao]

In the same boat. Never thought the bond would be raised so I settled in to the Escrow camp.

Now my question becomes, can they negotiate now before the remaining $750K is deposited or no?

They can negotiate any time they like.

 

[Slot]

I would like to know her reasons -- that would shed more light on her decision (or indecision).

The reasons for a $1-million bond are not readily apparent.

The original $250K bond had been to cover exposure for litigation expenses. No more is needed for that.

Glendale is not claiming damages for breach of the statute - it's claiming a right to rescind.

Thinking out loud here -- I wonder if she's thinking that if Glendale has the right to rescind it might also have the right to recover payments that flowed through to Tindall and Frisoni personally? If so, bumping the bond to $1-million might make sense on that basis. However, without reasons I really haven't a clue what her thought process is on this.

It will be the job of the lawyers to figure out what the judge is thinking now because that will tell them which buttons to press from here on in.

I think JimAnchower is onto something.

$750K is the remainder amount of the quarterly AMF payment from when CoG undertook to rescind the contract.

 

[Tom ServoMST3K]

I think JimAnchower is onto something.

$750K is the remainder amount of the quarterly AMF payment from when CoG undertook to rescind the contract.

Yeah, that was a good find.

 

[MNNumbers]

NEGOTIATIONS....

What would Glendale want? I think these things...

Approx 5MM/yr AMF
A portion of naming rights
Lower surcharges (lesser AMF takes care of that).
Some incentive clauses for non hockey events. Not for the city directly, but for the taxes, and the businesses in Westgate.

I think the city would want to avoid as much accounting back and forth with IA as they could, for IA has proven to be difficult to deal with.

What can IA absorb of that?
Not much, IMO. It amounts to quite a loss for them, depending in whether they think that can raise the prices by the amount of the surcharges, and if they can get parking revenue.

In short, a different long term lease does not seem to be very possible here.

 

[CasualFan]

Good decision by the judge. I posted a few days ago that prorating the AMF for 12Jun-30Jun to make bond an even $1MM seemed like the most appropriate ruling.

Things that stood out to me, judge confirms there is no on-point case law. And this from Twitter

Monica Lindstrom
1h1 hour ago
Monica Lindstrom ‏@monicalindstrom
J: City’s position is not frivilous @ArizonaCoyotes @KTAR923 @AZSports #Glendale


That's the judge saying the city's case isn't a joke. Maybe LeBlancs litigators are done LOL now?

 

[Ciao]

I think JimAnchower is onto something.

$750K is the remainder amount of the quarterly AMF payment from when CoG undertook to rescind the contract.

That explanation is as good as any other, and it does make sense

 

[Llama19]

They can negotiate any time they like.

But, will they ever leave...

 

[Whileee]

Seems reasonable, if the services we're already done.

Did she say anything about the next payment though?

Either way, IA needs to pony up another 750K

No problem. They can just reduce the player salary budget. The Pronger trade has it covered.

 

[CasualFan]

That explanation is as good as any other, and it does make sense

http://hfboards.mandatory.com/showpost.php?p=104180809&postcount=523

I'm curious to see if Defendants advance a $750,000 bond theory at the hearing (18 days between 6/12-6/30 x daily rate of the AMF) to make the bond an even $1MM. Either way, it is my strong opinion that IA should be compensated for services provided and the July 1 payment should flow to them - unless, the judge wants to treat the hearing as a re-do of the rushed TRO hearing and allow the city to attack the "likely to prevail on merits" prong.

Sounds like the judge did it for them. Sounds like an active bench. Hopefully when July 31 gets here, there will still be a reason to reconvene

 

[Slot]

Lindstrom's tweets make it sound like the judge was pretty prepared for this hearing.

Put a pin in IA's trial balloon of personal waiver of conflict of interest. The statute does not consider conflict of interest, only if the person(s) in question had significant input on the contract. Also told them that cost recovery was not limited to payments to Frisoni and Tindall.

OTOH she told CoG that they had to pay for services rendered as there is no pre-existing case law on the recovery of funds, that will be an interesting side-line to follow. As JimAnchower pointed out the increase of $750K to the bond is almost the exact amount of money that would have covered the final 18 days of the quarterly AMF payment.

Reading the tea leaves on that I'd look for any future AMF payments to go into escrow (if this process goes for that length of time).

This is wide open legal territory (no case law on this statute so far as the legal beagles on this forum can find), the judge is definitely minding where she puts her feet.

 

[Whileee]

I thought she might escrow the funds. Ordering the City to pay is a better result for the Coyotes than I expected. Increasing the bond to $1M isn't that big a deal. It ties up $1M in assets, but getting the cash is a lot more significant than the cost of the bond, or posting collateral.

Of course, on the merits, I don't think anyone should read anything in to this in terms of where the court may land. I think the judge is troubled there is no real case law on point (in her view) to guide her.

She could either go the route CF suggests that Tindall rewording the res. and ord. is prima facia substantial involvement, or she could go down the road of looking at the magnitude of the deal, and see Tindall and Frozoni on balance as "involved" but not "substantially" when put in context of the deal as a whole. She may also look at the issue of self-dealing, and not see that as really the case here, which could cause her to not find in the City's favor.

I will be interested whether she rules on what evidence is relevant. Based upon the strict reading of the statute, anything LeBlanc and Tindall talked about pre-IA may not be relevant since Tindall didn't go to work for IE or RSE, so on the face of the language of the statute, those dealings may not even be considered by the court.

I'm not going to handicap the outcome since I admit I don't know what all the evidence will show. I also don't have a real good sense of what the judge sees as the important issues and facts.

Waiver could be a wildcard, although I don't like IA's argument on that in light of the fact we are dealing with a statute, and not equitable or purely contractual rights.

LeBlanc changes his "company" faster than Tippett changes lines.

It would be an interesting precedent for a judge to find that all you need to do to avoid the 38-511 statute is to change the name of your company.

I have a feeling that Glendale will be able to show a pretty compelling unbroken relationship between Tindall and LeBlanc that transcends the various companies LeBlanc set up to try to benefit from Glendale's willingness to subsidize the Coyotes' owners. Remember the line about putting "the band back together"? That sort of says it all.

 

[cbcwpg]

LeBlanc: This just got serious Gary, what do we do?

 

[MNNumbers]

LeBlanc: This just got serious Gary, what do we do?

What do you think really changed for LeBlanc? Do you think that he actually thought he had a clear case for dismissal?

 

[Llama19]

LeBlanc: This just got serious Gary, what do we do?

Gary: Hello Mr. Allen? Can you meet with me at our usual Starbucks?

 

[goyotes]

Good decision by the judge. I posted a few days ago that prorating the AMF for 12Jun-30Jun to make bond an even $1MM seemed like the most appropriate ruling.

Things that stood out to me, judge confirms there is no on-point case law. And this from Twitter

Monica Lindstrom
1h1 hour ago
Monica Lindstrom ‏@monicalindstrom
J: City’s position is not frivilous @ArizonaCoyotes @KTAR923 @AZSports #Glendale


That's the judge saying the city's case isn't a joke. Maybe LeBlancs litigators are done LOL now?

Basically, an escrow since time of council vote, without really requiring an escrow. I agree. I think it will be difficult for IA to get the permanent injunction on the 31st. Lots more bleeding over into the merits side of the case at that point. I don't think most observers would have said the City's case was frivolous as we use the term in litigation. I'm not sure that equates to the judge thinking the City's case is weak or strong (not implying you said that CF).

I can't help but think that the City's strategy of a renegotiation of the arena management deal isn't a bad one here. After everyone cools off, and sees the other side's arguments in writing, there may be a way for IA to cut off a couple million in revenue and still make the deal attractive to them for another three years or so (until they exercise the out clause).

One point that keeps popping up is relocation. People need to keep in mind that the Coyote's lease is not being terminated. The Coyotes still have a lease with the City of Glendale. Arguably, nothing the City of Glendale has does excuses the Coyotes from honoring their lease until the out clause can be exercised. And, just as importantly, even if the City wins it's case, it can't throw the Coyotes out of GRA.

I know everything with the Coyotes leads to some people talking about relocation, but nothing in this case has any direct or immediate bearing on whether the Coyotes have a place to play next year.