Phoenix XXII: It's Now or Never

[OthmarAmmann]

Obfuscate? You have a grossly incorrect view of what corporate lawyers do.

I have to admit that this made me laugh. I work with lawyers frequently and like to rip on them when the opportunity presents itself.

I agree that the level of specificity in the work of any attorney is quite high, as demonstrated by the 1.25 page "paragraph" 2.1 of the Easement agreement that you posted. One could argue however that the level of specificity is such that it often renders the work intractable to the uninitiated.

 

[Fugu]

Obfuscate? You have a grossly incorrect view of what corporate lawyers do. One hundred and eighty degrees to the opposite, strangely enough. I am not sure where you would get your mistaken views.

Actually, I don't. You have a grossly inflated view of the honor of lawyers. I'm not sure where you would get your mistaken views.

In fact, suggesting that an ordinary default clause is an "out clause" within the commonly understood meaning of the term is obfuscation of a very high order. An out clause is a provision which permits a party to exit an agreement (whether with or without penalty) where a circumstance has arisen which is through no fault of the other party but has rendered the deal unworkable. For example, the provisions that Craig Leipold had for NASH related to hockey attendance would be an "out clause". Another example is a condition precedent of financing that one would see in the vast majority of real estate transactions and many M&A deals.

Calling a provision whereby a party can terminate an agreement because of a non-payment of amounts owing is not an "out clause".

Obfuscation implies there's a purposeful intent to cover up or mislead or even omit. Don't accuse me of this again, because unlike others, I do this for a hobby.

It is a default clause, same as every other contract. There are default rights in the event of a default by the team or arena manager as well.

Incidentally, as is the case with any sophisticated agreement, there are "cure rights" - thirty days after receipt of a notice of non-payment within which to cure the default by paying, for example.

You could have saved yourself the time of writing up half the post by cutting to the chase. That, of course, wouldn't have afforded you the opportunity to discuss your fellow posters however.

 

[Fugu]

You'll have to forgive my simplification... I almost feel like saying "commander Data, check your memory banks under the heading 'comedy'". I was using the scenario for a chuckle.

Yes there are distinct differences between an out clause and a default clause, but both can have similar remedies which is a termination of the deal. It is this like remedy which cause us lay folk to call the different definitions "splitting hairs". Us lay people are not correct, but it doesn't mean we don't grasp the ramifications of the results.

It really would have been very easy to just say this upfront.

It is possible under specific conditions for MH to terminate his lease and move. I guess we don't want anyone worrying their pretty little heads about these kinds of things. The NHL is too busy bamboozling taxpayers out of even more money.

 

[GSC2k2*]

If the Beatles songs are the parking lot....Michael Jackson (his estate) owns the parking lot. So he can charge for people to park in it/play the songs.

He OWNS them.

Who OWN da parking lot? Owwwwnnnnss, Owwwnnnssss.

If Moyes had the parking rights when he put the team into bankruptcy wouldn't those rights go back to the Owner to reach an agreement with somebody else to purchase those rights for a specific period of time??

No.

His simile was as follows:

The Beatles songs themselves - the words, music, etc. - are the parking lot.

The right to play the Beatles songs - the right that is given to radio stations to allow them to play - are the parking rights.

Michael Jackson's estate would get paid by someone to play that song. It doesn't mean that he wrote "Yesterday" or "Help!".

You can split those two things up, just like you can split up ownership of a piece of property and the right to use that property for whatever - say, parking cars and charging.

Long ago, in the 2000's, those two things got split up by the CoG.

To answer your bankruptcy question, the answer is no. A bundle of contractual rights is an asset, just like any other asset. They are part of the bankrupt estate. The vast majority of Moyes' assets were contractual rights. The parking rights would no sooner go back to the "owner" (whcih would be Ellman's development company) than the NHL's franchise rights given to Moyes would go back to the NHL. They are the bankrupt's assets.

 

[GSC2k2*]

I have to admit that this made me laugh. I work with lawyers frequently and like to rip on them when the opportunity presents itself.

I agree that the level of specificity in the work of any attorney is quite high, as demonstrated by the 1.25 page "paragraph" 2.1 of the Easement agreement that you posted. One could argue however that the level of specificity is such that it often renders the work intractable to the uninitiated.

If one were to argue that, I would agree. Finding a balance between covering everything and still being clear is tough. A good drafter is hard to find. Sometimes, though, it is just because the parties (as distinct from their counsel) have made the deal complicated.

 

[Whileee]

If one were to argue that, I would agree. Finding a balance between covering everything and still being clear is tough. A good drafter is hard to find. Sometimes, though, it is just because the parties (as distinct from their counsel) have made the deal complicated.

I expect that the ASG group would concur with the importance of clarity, having struggled with the Thrashers' ownership debacle for some time....

 

[OthmarAmmann]

If one were to argue that, I would agree. Finding a balance between covering everything and still being clear is tough. A good drafter is hard to find. Sometimes, though, it is just because the parties (as distinct from their counsel) have made the deal complicated.

Right, and it is of course a much higher priority for a lawyer to consider all contingencies than to draft an easily read agreement.

To a certain degree I believe part of the issue (if one wants to call it that) is that the legal profession is constrained to a certain extent by common law. The language that is currently used in drafting is influenced heavily by English as it was spoken a century or more ago, but the language has changed significantly in that time. Accountants on the other hand are free to say "forget everything we've done up to now... this is how we're going to do it from now on". The legal profession generally does not have the same liberty.

Or I could be wrong. Who the hell knows anything about law anyway.

 

[OthmarAmmann]

I expect that the ASG group would concur with the importance of clarity, having struggled with the Thrashers' ownership debacle for some time....

Was that an issue with the style used in drafting, or an issue of neglecting to address some contingency? Or something else all together?

Those are not rhetorical questions. I actually have no idea (frankly haven't been bothered to follow that saga).

 

[Whileee]

Was that an issue with the style used in drafting, or an issue of neglecting to address some contingency? Or something else all together?

Those are not rhetorical questions. I actually have no idea (frankly haven't been bothered to follow that saga).

I am not entirely clear, but this is what I understand.

The claim by ASG is that the lawyers that drafted their partnership agreement with Belkin did so in such a way as to leave an unresolvable conundrum. Essentially, there were processes set up to govern the buy-out (of Belkin) that included having a third party conducting a valuation of the franchise. There was a procedure spelled out in terms of who could select the firm for the valuation, and the steps to follow in case the other party disagreed with the valuation. However, the contract did not contemplate that both ownership groups (i.e. ASG and Belkin) might reject the valuation. When that did in fact occur, it left them in a legal tangle with no clear process to buy out Belkin. They finally came to an agreement in December 2010.

I am sure that others on this board are more versed in this case than I.

 

[OthmarAmmann]

unresolvable conundrum

I would bet dollars to donuts that was an issue with failing to consider a contingency (i.e., "never saw that coming!") rather than an issue with clarity (e.g. "eats, shoots, and leaves" vs "eats shoots and leaves")

Again, don't know anything about the case. Of course that won't stop me from commenting on it but whatever.

 

[AllByDesign]

It really would have been very easy to just say this upfront.

It is possible under specific conditions for MH to terminate his lease and move. I guess we don't want anyone worrying their pretty little heads about these kinds of things. The NHL is too busy bamboozling taxpayers out of even more money.

This is where the frustration from the work-a-day tax payer originates. Why no one trusts a politician or a lawyer... or even sales-folk. Mincing words to present a certain appearance, veiled in a technicality.

Funny thing is that I used to subscribe to this rationell. Survival of the fittest, look after your own backyard etc etc. Boy things change when kids enter the picture. You start to consider the welfare of others for one... the other is you get an inherent ability to smell BS a mile away.

 

[Ciao]

How did the Tea Party go last evening?

 

[aj8000]

How did the Tea Party go last evening?

Ran out of tea, had to drink coffee instead.

 

[cheswick]

No.

His simile was as follows:

The Beatles songs themselves - the words, music, etc. - are the parking lot.

The right to play the Beatles songs - the right that is given to radio stations to allow them to play - are the parking rights.

Michael Jackson's estate would get paid by someone to play that song. It doesn't mean that he wrote "Yesterday" or "Help!".

You can split those two things up, just like you can split up ownership of a piece of property and the right to use that property for whatever - say, parking cars and charging.

Long ago, in the 2000's, those two things got split up by the CoG.

To answer your bankruptcy question, the answer is no. A bundle of contractual rights is an asset, just like any other asset. They are part of the bankrupt estate. The vast majority of Moyes' assets were contractual rights. The parking rights would no sooner go back to the "owner" (whcih would be Ellman's development company) than the NHL's franchise rights given to Moyes would go back to the NHL. They are the bankrupt's assets.

This similie just confuses matters more. First off Lennon (estate) /McCartney still get significant royalties from anytime one of their songs is licensed. Secondly the Jackson estate is no longer the sole owner of said rights, Jackson having combined his publishing rights with some Sony property for 50% ownership in the larger catologue.

 

[Ciao]

Ran out of tea, had to drink coffee instead.

Did the coffee invigorate them enough to initiate legal proceedings?

 

[jamwires]

Daryl Jones is Pete Best.

 

[Dado]

This thread is becoming impossible to read, again.

Has the lease been finalized and signed yet? Have sufficient bonds been sold? Is March 1 really a deadline?

 

[mouser]

It really would have been very easy to just say this upfront.

It is possible under specific conditions for MH to terminate his lease and move. I guess we don't want anyone worrying their pretty little heads about these kinds of things. The NHL is too busy bamboozling taxpayers out of even more money.

I think what really matters is that MH cannot unilaterally terminate the lease.

 

[OthmarAmmann]

On a somewhat related note, Illinois had no problem issuing $3.7 billion of their A1 bonds. Apparently demand from hedge funds and sovereign wealth funds was strong. The rate they ended up with was costly though: 5.88% for bonds maturing no later than 2019. The Glendale MPC issue would have to pay a higher rate than the Illinois since they generally mature at a later date than the Illinois issue.

The use of funds from the Illinois issue was rather dubious... the funds will be used to cover this year's contribution to their pension fund. They are essentially kicking the can a bit further down the road. Again.

 

[Roadrage]

I think what really matters is that MH cannot unilaterally terminate the lease.

So if CoG is late in their payments, MH can't terminate lease without CoG saying OK or agreeing? Then what's to stop CoG from being "late" a few more times without penalty over life of the agreement?

 

[Killion]

I think what really matters is that MH cannot unilaterally terminate the lease.

Indeed not, and that of course is key. As OA points out, the language of the law tends to be archaic & arcane, antiquated, confuses' many, myself included.

 

[Fugu]

I think what really matters is that MH cannot unilaterally terminate the lease.

And rarely in contracts [between two or more parties, duh] is it possible to terminate unilaterally. Otherwise they wouldn't need legions of lawyers to clarify or complicate matters, depending on your perspective. This isn't a legal board and we may use common terms without the ability to discern the finer points of how/when termination is possible. The question is whether or not Hulsizer has/had any options to terminate the current lease under discussion.

It is a fair question because Elman/Moyes, as far as I know, had no option under any circumstances to terminate their lease with CoG without paying $500-700m [or whatever the actual figure was] to terminate their lease. Except bankruptcy, apparently.

THEREFORE, I assume that if CoG defaults in providing Hulsizer with his subsidies (you guys can call it whatever you like, I don't need to play these games), he in fact can deem the lease null and void if it is not cured within a contractually specified time.

Someone tell me I'm wrong.

 

[Killion]

The use of funds from the Illinois issue was rather dubious... the funds will be used to cover this year's contribution to their pension fund. They are essentially kicking the can a bit further down the road. Again.

I refrained. Seems Michigans' suing Illinois, holding them responsible for the Asian Carp infestation. They dont get a handle on it, every single state, province county & muni with Great Lakes waterfront is going to be lining up for same. Gonna be costly.

So if CoG is late in their payments, MH can't terminate lease without CoG saying OK or agreeing? Then what's to stop CoG from being "late" a few more times without penalty over life of the agreement?

That would be correct. There are "cure remedies" inserted into the agreement which would allow for arbitration & resolution. Remember as well, the COG put $10M (very recently) into escrow earmarked for MH pursuant to the Arena Mgmnt fee's, something they'll likely do pre-annually so "being late with the payments" is not a very likely scenario IMO, as they can move money around from account to account to account, replenishing one from another pretty much at will.

 

[bleed_oil]

No.

His simile was as follows:

The Beatles songs themselves - the words, music, etc. - are the parking lot.

The right to play the Beatles songs - the right that is given to radio stations to allow them to play - are the parking rights.

Michael Jackson's estate would get paid by someone to play that song. It doesn't mean that he wrote "Yesterday" or "Help!".

You can split those two things up, just like you can split up ownership of a piece of property and the right to use that property for whatever - say, parking cars and charging.

Long ago, in the 2000's, those two things got split up by the CoG.

To answer your bankruptcy question, the answer is no. A bundle of contractual rights is an asset, just like any other asset. They are part of the bankrupt estate. The vast majority of Moyes' assets were contractual rights. The parking rights would no sooner go back to the "owner" (whcih would be Ellman's development company) than the NHL's franchise rights given to Moyes would go back to the NHL. They are the bankrupt's assets.

I was wondering why the pompousness level on on hfboards was spiking.
Lets cut to the chase Carpenter. Don't make me read 10,000 posts. Are the coyotes moving to Winterpeg or will NHL players continue to happily play games that are only watched by them and there family? Should Shane Doan's son fear recess next winter w\ -35C wind chill.... thats the real question.

 

[Killion]

THEREFORE, I assume that if CoG defaults in providing Hulsizer with his subsidies (you guys can call it whatever you like, I don't need to play these games), he in fact can deem the lease null and void if it is not cured within a contractually specified time....Someone tell me I'm wrong.

Yeah, ya see here we go now. I've just got believe that there are clauses' written into the Arena Mgmnt Agreement (cant find anything in the lease however we have yet to see the "Final Version") that contemplates just such a possibility. There is just no way any prudent individual with conscientious council would put pen to paper to an agreement (unless your names Steve Ellman or Jerry Moyes) that does not create, given the right set of circumstances & failure to remedy, the option to relo the franchise. Now, it likely includes all kinds of opportunity for the COG to find a new owner & so forth, and I dont think anyone here is in denial that such an eventuality is possible, the problem seems to be one of interpretation & semantics. Just sayin Fugu....