Phoenix XXVIII: Lawyers, Bonds and Money

[Fugu]

Here is something of concern and may be revealing on this matter:

From the 2010-11 Arena Management and Operations Agreement
between the NHL (Owners) and the City of Glendale
http://beta.images.theglobeandmail.com/archive/00660/Glendaledocs_pdf_660002a.pdf
5.1 The Owners and the City will use their respective best efforts to cause all of the Debtors' interests, rights and obligations in and under
(i) the Agreement for Replacement of Temporary Parking dated July 1, 2008 and filed with the Glendale City Clerk as Document No. C-5575-1;
(ii) the Collateral and Subordination Agreement dated July 1, 2008 and filed with the Glendale City Clerk as Document No. C-5575-2 and
(iii) the First American Title Insurance Company Construction Disbursement Escrow Agreement, date July 1, 2008 and recorded with the Glendale City Clerk as Document No. C-5575-3
(collectively the "Parking Agreements") to be transferred and assigned to the City, including, if necessary, by effecting the assumption of the Parking Agreements by the Owners from the Debtors in the Bankruptcy case, and, if such assumption is effectuated, immediately transferring and assigning to the City, all of the Owners' interests, rights and obligations in and under the Parking Agreements, all at the City's expense.

5.2 The City will indemnify and hold harmless the indemnified persons (as defined in clause 6.9 [effectively the NHL]) with respect to any and all claims, expenses and losses, arising out of, relating to or in connection with such assumption and transfer of the Parking Agreements ...

So therein, depending on if that happened, may lie Goldwater's concern about the City already owning the Parking Rights. In all the prior agreements I've seen - except the original MUDA and AMULA, the team held those rights or there was some sort of evidence that they did and no evidence I've seen that the city held those rights after the first AMULA and MUDA. After the first AMULA and MUDA, I don't even see the City as a party in a number (if not all) of the parking agreements before this court. But above is a path on how the city might have recently acquired them.

Beyond that, I need to give those clauses some thought.

Moyes is still on the hook, potentially, for damages to CoG, afaik.

If they had a right to assume the parking rights and failed, although your work above sheds some interesting twists to this, Debtors might be an interesting position as far as defending the amt of their liability (or demanding some portion thereof... but I think that would rest with J Baum).

 

[Fugu]

Should read:

03-11-2011 Phoenix XXVII: Can we all get along? [UPD: GWI to file suit, post 689)

mixed parenthesis included...

Edit: Just looked back at that Goldwater post mentioned the previous thread title, and it is in fact post 688...

Something got deleted after I posted that..... Ah well, best to just remove the UPD.

 

[Killion]

Rich Uncle Pennybags?

Yepp. That guy. Good job....

could hulsizer use the $197 million glendale gives him to build a rink in scottsdale?

cest' criminale' non?.

Debtors is still on the hook, potentially, for damages to CoG, afaik.

Just completely messed up, giving rise to all kinds of Conspiracy Theories from my shuttered Turrets'.....

(and whats that afaik?. Some kind of secret code to change the topic because were getting to close to the truth?)

 

[Niagara67]

Not sure if someone else has pointed this out (so many posts to read )..but the musical chair rumour in BC was..

1. move Chilliwack WHL to Victoria.
2. move Abbotsford AHL to Chilliwack.
3. move Manitoba AHL to Abbotsford.

That would give lonely Abbotsford an AHL rival. Road teams could play 2 teams on their trip instead of just 1. (To me though, it would make more sense to make Victoria AHL).

 

[Whileee]

I wonder if we are making a bit too much about what the GWI does and doesn't state in their public statements about the deal. If they are serious about legal action, as they appear to be, then it would strike me as odd for them to telegraph all of the key elements of their legal argument. So the fact that they don't mention a particular issue in a public release seems to be a thin reed to lean on when speculating about their full legal strategy.

 

[Larabee]

Not sure if someone else has pointed this out (so many posts to read )..but the musical chair rumour in BC was..

1. move Chilliwack WHL to Victoria.
2. move Abbotsford AHL to Chilliwack.
3. move Manitoba AHL to Abbotsford.

That would give lonely Abbotsford an AHL rival. Road teams could play 2 teams on their trip instead of just 1. (To me though, it would make more sense to make Victoria AHL).

Some also asked about the purchase price of an AHL team. Seems to be around the 5 Million mark.

 

[Ciao]

I haven't been able to follow this, so forgive me if I'm missing something or duplicating.

I did see one post suggesting that if the NHL hasn't assumed the parking rights and the assumption deadline has passed, they could obtain an order on consent extending the time to assume those rights.

If Glendale's consent were required (and I don't know if it is), how could Glendale give consent free-of-charge without violating the gift clause while at the same time maintaining that the parking rights have such substantial value?

 

[Confucius]

(and whats that afaik?. Some kind of secret code to change the topic because were getting to close to the truth?)

As Far As I Know

c'mon, riddler

 

[Jarqui]

Yes, that's been my feeling as well--- if such an agreement exists and was part of the Moyes three tiers of LLC's that held either the team and mgt/arena rights, etc., he certainly terminated everything around June 30, 2010. If the NHL had not exercised it's right by June 30, 2010, there would NO REASON whatsoever for the CoG to give the rights to the NHL, or anyone else. This is elevated to the nth degree if these rights have real value (or anything approaching $100m).

Furthermore, I seem to recall a clause that if the team was sold and moved, the bankrupt estate would be on the list to share in the proceeds above and beyond some level after the NHL recouped it's payment. If the NHL possesses something that is valued at $100m + the NHL team, would this not also be covered by the BK agreement against prior claims from unsecured parties? Glendale is in the interesting position of having a claim against the estate for termination of the lease, but then dishing out $100m to buy something that the estate once held. (Hope that convoluted bit made sense to someone.)

After the Nov, 2009 decision, I haven't followed the court case itself as much. From notes I had:

On June 24, 2010
http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_1268.pdf
3. Nothing in this Stipulated Order may be construed as a waiver of any rights,
arguments, objections, or defenses of any Party, including, without limitation, as to (a) the PHOENIX/528468.2 3
rejection of the AMULA or other Glendale Contracts (as those terms are defined in the Asset
Purchase Agreement dated as of November 2, 2009 between, among others, the Debtors,
Coyotes Newco, LLC, and Arena Newco, LLC) and any claims arising in connection with any
such rejection, and (b) any argument made by any Party that certain matters (including ones
raised by one or more of the docket entries listed above) are premature or otherwise not ripe for
decision at such time.

4. Each Party agrees that it will not initiate or move forward with any contested
matter, litigation, settlement, or compromise concerning any of Glendale’s or Moyes’s claims in
these cases or causes of action against the Parties, including, without limitation, objections to any
such claims or motions for allowance of any such claims, except in accordance with this
Stipulated Order.

and that was followed by this (with maybe some decisions in between):
http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_1331.pdf
Mr. Kroop advises the court that there has been positive negotiations between the debtor, the City of
Glendale and Moyes. There is an agreement in principle to prepare a consensual plan based on the plan
already on file. An amended plan and disclosure statement will be filed and all of the other matters on
calendar today can be adjourned until after plan confirmation. He discusses the issues with the court.

The gist is that from mid spring 2010 (if not sooner and throughout) well into the fall, they were bickering about all kinds of stuff and the hearing dates kept getting moved so I didn't find out how it all got resolved. Some of the proposed plans in spring 2010 involved effective dates, etc and they weren't in agreement.

So it is possible the contracts didn't get rejected/assumed (unless I've missed something that someone else knows about).
I just haven't had time to to crawl through it all to try to figure it out.

Glendale is in the interesting position of having a claim against the estate for termination of the lease, but then dishing out $100m to buy something that the estate once held. (Hope that convoluted bit made sense to someone.)

Makes plenty of sense to me. It's a good question that requires more thought on my part. Not only is the deal complicated from the contracts and the gift clause but they really have to satisfy the legal rubiks cube here to factor in the bankruptcy. Debtor/creditor Moyes may well argue: "Hey, where's my cut of the parking rights?" depending on what was promised by the NHL who had already bought them.

 

[leoleo3535]

Some also asked about the purchase price of an AHL team. Seems to be around the 5 Million mark.

Seems about right....I have heard $2.5 - $4.5 million depending on market.

Junior teams also vary alot depending on market......the offer for Chilliwack is said to be $7 - $8 million.

 

[y2kcanucks]

Not sure if someone else has pointed this out (so many posts to read )..but the musical chair rumour in BC was..

1. move Chilliwack WHL to Victoria.
2. move Abbotsford AHL to Chilliwack.
3. move Manitoba AHL to Abbotsford.

That would give lonely Abbotsford an AHL rival. Road teams could play 2 teams on their trip instead of just 1. (To me though, it would make more sense to make Victoria AHL).

I honestly don't see how Chilliwack could support an AHL hockey team...

 

[Jet]

Not sure if someone else has pointed this out (so many posts to read )..but the musical chair rumour in BC was..

1. move Chilliwack WHL to Victoria.
2. move Abbotsford AHL to Chilliwack.
3. move Manitoba AHL to Abbotsford.

That would give lonely Abbotsford an AHL rival. Road teams could play 2 teams on their trip instead of just 1. (To me though, it would make more sense to make Victoria AHL).

I seriously doubt Chilliwack could support an AHL team. However, whats to stop the Abbotsford franchise from moving to the Pacific Colloseum and move the Moose to Abbotsford?

 

[goyotes]

Just checking in from yesterday (and yet a whole thread removed) to take my lumps. Having insisted that the GWI would not sue, it appears they will sue when the deal closes. Heap on the "I told you" so's. I was wrong.

Having said that, I simply cannot believe this is the course they charted. This could indeed by their Waterloo. Best case is they win and get blamed for all the problems Westgate will present. Everyone (unfairly so IMO) will assume Westgate would have been a great success had the Coyotes stayed. The public will blame the GWI. Worse case is they lose, expose themselves and their directors to affirmative claims, and regardless, become responsible for having cost the taxpayers money.

The tide of public opinion down here has really turned against the GWI. A recent poll of over 5,000 participants surveyed had 72% in favor of the CoG's decision. Previously uncommitted media are now coming out and questioning the GWI and its motives. The Coyotes have been the lead story on TV news and sports. All the news has been pro-Coyotes staying and pro-CoG. Most have at a minimum questioned the GWI, and some have been openly critical. Fox10 news last night is just an example (yes, the same Fox Network).

Anyway, I will take my lumps now. "Thank you sir, may I have another."

 

[IceAce]

you guys and your kilometers!

 

[Dado]

The Mausoleum is already home to a very successful Junior team.

 

[Metzen]

Would seem funny for one owner of an NHL team to own the Farm team of another (conflict of interest).

Doesn't this happen in the NHL pretty frequently? It was only 3 seasons ago the Penguin's were sharing their farm team with the Oiler's as the Oiler's had no AHL affiliate. This is not the ideal situation as I recall the Oiler's brass complaining that their top prospects were getting little playing time behind the Pen's prospects.

Nothing the Oiler's could do about it though.

 

[Evil Doctor]

Something got deleted after I posted that..... Ah well, best to just remove the UPD.

I'm sure kdb would appreciate it, save him having to correct his list...

 

[Jet]

Just checking in from yesterday (and yet a whole thread removed) to take my lumps. Having insisted that the GWI would not sue, it appears they will sue when the deal closes. Heap on the "I told you" so's. I was wrong.

Having said that, I simply cannot believe this is the course they charted. This could indeed by their Waterloo. Best case is they win and get blamed for all the problems Westgate will present. Everyone (unfairly so IMO) will assume Westgate would have been a great success had the Coyotes stayed. The public will blame the GWI. Worse case is they lose, expose themselves and their directors to affirmative claims, and regardless, become responsible for having cost the taxpayers money.

The tide of public opinion down here has really turned against the GWI. A recent poll of over 5,000 participants surveyed had 72% in favor of the CoG's decision. Previously uncommitted media are now coming out and questioning the GWI and its motives. The Coyotes have been the lead story on TV news and sports. All the news has been pro-Coyotes staying and pro-CoG. Most have at a minimum questioned the GWI, and some have been openly critical. Fox10 news last night is just an example (yes, the same Fox Network).

Anyway, I will take my lumps now. "Thank you sir, may I have another."

Well to be honest you had about as much of a chance as any to be right, and still do. Who the heck knows what will happen next in this crazy story?

I also see that the bond sale that they said was close to completion is once again stalled. I don't think people buy these bonds at any interest rate that CoG can realistically bear with the very real threat of a lawsuit hovering.

We still may never find out if GWI would really have sued or if they were pushing a little harder to stop the bond issue.

 

[Fugu]

I haven't been able to follow this, so forgive me if I'm missing something or duplicating.

I did see one post suggesting that if the NHL hasn't assumed the parking rights and the assumption deadline has passed, they could obtain an order on consent extending the time to assume those rights.

If Glendale's consent were required (and I don't know if it is), how could Glendale give consent free-of-charge without violating the gift clause while at the same time maintaining that the parking rights have such substantial value?

You're following the same train of thought several of us have undertaken. Problem is the collective "we" cannot find any document that sheds light on what happened after Jun 30 2010, at which Moyes estate would have terminated/rejected the old agreements.

Here's the latest:

Moyes is still on the hook, potentially, for damages to CoG, afaik.

If they had a right to assume the parking rights and failed, although your work above sheds some interesting twists to this, Debtors might be an interesting position as far as defending the amt of their liability (or demanding some portion thereof... but I think that would rest with J Baum).

After the Nov, 2009 decision, I haven't followed the court case itself as much. From notes I had:

On June 24, 2010
http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_1268.pdf
3. Nothing in this Stipulated Order may be construed as a waiver of any rights,
arguments, objections, or defenses of any Party, including, without limitation, as to (a) the PHOENIX/528468.2 3
rejection of the AMULA or other Glendale Contracts (as those terms are defined in the Asset
Purchase Agreement dated as of November 2, 2009 between, among others, the Debtors,
Coyotes Newco, LLC, and Arena Newco, LLC) and any claims arising in connection with any
such rejection, and (b) any argument made by any Party that certain matters (including ones
raised by one or more of the docket entries listed above) are premature or otherwise not ripe for
decision at such time.

4. Each Party agrees that it will not initiate or move forward with any contested
matter, litigation, settlement, or compromise concerning any of Glendale’s or Moyes’s claims in
these cases or causes of action against the Parties, including, without limitation, objections to any
such claims or motions for allowance of any such claims, except in accordance with this
Stipulated Order.

and that was followed by this (with maybe some decisions in between):
http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_1331.pdf
Mr. Kroop advises the court that there has been positive negotiations between the debtor, the City of
Glendale and Moyes. There is an agreement in principle to prepare a consensual plan based on the plan
already on file. An amended plan and disclosure statement will be filed and all of the other matters on
calendar today can be adjourned until after plan confirmation. He discusses the issues with the court.

The gist is that from mid spring 2010 (if not sooner and throughout) well into the fall, they were bickering about all kinds of stuff and the hearing dates kept getting moved so I didn't find out how it all got resolved. Some of the proposed plans in spring 2010 involved effective dates, etc and they weren't in agreement.

So it is possible the contracts didn't get rejected/assumed (unless I've missed something that someone else knows about).
I just haven't had time to to crawl through it all to try to figure it out.


Makes plenty of sense to me. It's a good question that requires more thought on my part. Not only is the deal complicated from the contracts and the gift clause but they really have to satisfy the legal rubiks cube here to factor in the bankruptcy. Debtor/creditor Moyes may well argue: "Hey, where's my cut of the parking rights?" depending on what was promised by the NHL who had already bought them.

 

[Jet]

The Mausoleum is already home to a very successful Junior team.

I realize that. But you see Calgary has an NHL and CHL team in the same building, why not an AHL and CHL team?

 

[Jet]

you guys and your kilometers!

Ahem... its KILOMETRES! We aren't savages, you know!

 

[OthmarAmmann]

Just checking in from yesterday (and yet a whole thread removed) to take my lumps. Having insisted that the GWI would not sue, it appears they will sue when the deal closes. Heap on the "I told you" so's. I was wrong.

Having said that, I simply cannot believe this is the course they charted. This could indeed by their Waterloo. Best case is they win and get blamed for all the problems Westgate will present. Everyone (unfairly so IMO) will assume Westgate would have been a great success had the Coyotes stayed. The public will blame the GWI. Worse case is they lose, expose themselves and their directors to affirmative claims, and regardless, become responsible for having cost the taxpayers money.

The tide of public opinion down here has really turned against the GWI. A recent poll of over 5,000 participants surveyed had 72% in favor of the CoG's decision. Previously uncommitted media are now coming out and questioning the GWI and its motives. The Coyotes have been the lead story on TV news and sports. All the news has been pro-Coyotes staying and pro-CoG. Most have at a minimum questioned the GWI, and some have been openly critical. Fox10 news last night is just an example (yes, the same Fox Network).

Anyway, I will take my lumps now. "Thank you sir, may I have another."

They might figure they have no other choice. I had thought that maybe their best course of action would be to step aside with reservations, and lay out the I-told-you-so when the city inevitably ran into financial trouble. As some have pointed out though, in that situation they look like they were asleep at the switch.

Maybe if there's enough public pressure placed on them they will be able to step aside but redeem themselves when the city hits budget trouble. It's probably become too personal for that though.

 

[goyotes]

Well to be honest you had about as much of a chance as any to be right, and still do. Who the heck knows what will happen next in this crazy story?

I also see that the bond sale that they said was close to completion is once again stalled. I don't think people buy these bonds at any interest rate that CoG can realistically bear with the very real threat of a lawsuit hovering.

We still may never find out if GWI would really have sued or if they were pushing a little harder to stop the bond issue.

I saw that report too, but I don't think it was reported as hard news, but more as an assumption. I think the the issue of a suit was already cooked into any deal on the interest rates, so I'm not sure this will stop the sale. But at this point, it is pure speculation on my part.

MH talked to Fox 10 last night. He stated that he would press forward with the deal. That this was not unexpected. And that he thought the bond transaction might close this week.

Who knows?

They might figure they have no other choice. I had thought that maybe their best course of action would be to step aside with reservations, and lay out the I-told-you-so when the city inevitably ran into financial trouble. As some have pointed out though, in that situation they look like they were asleep at the switch.

Maybe if there's enough public pressure placed on them they will be able to step aside but redeem themselves when the city hits budget trouble. It's probably become too personal for that though.

There have been some "tweets" by some pretty politically connected individuals commenting on the Coyote situation basically saying cannot lose the Coyotes...time for some leadership...yadda, yadda. Grant Woods, close friend of McCain, being someone who tweeted out something along those lines last night.

I would not be surprised to see one or two of the GWI Directors resign because they are not willing to take a chance the CoG could sustain a suit.

I agree, the GWI should have done everything they could to be in a position to come back next time and say "I told you so." The real victory and utility for them in this situation is to prevent any new publically subsidized arenas. However, they sat back and let it happen with Cactus League stadiums. They never did a thing to stop them from being built. It looks like the Cubs will get a new one in Mesa, and the GWI has shown no opposition. All paid for with taxpayer money.

 

[Killion]

As Far As I Know....c'mon, riddler

Honestly. Had no idea what it was an anagram for.

I seriously doubt Chilliwack could support an AHL team. However, whats to stop the Abbotsford franchise from moving to the Pacific Colloseum and move the Moose to Abbotsford?

Boy, were really stretching this threads premise in considering minor league ramifications IF Phoenic loses the Coyotes, and IF Winnipeg secures the franchise for 2011-12 huh?. But anyway.....why move the Heet from Abbotsford to Vancover & the Moose into Abbotsford?. Just move the Moose to the Pacific Coliseum. And ya, your right about Chilliwack. Not a chance. Abbotsfords not that far away, and even they arent exactly breaking the bank through the box office, the jury still out as to whether or not they'll make it. Frankly, the only market out here that an AHL team would succeed IMO is Victoria. Forget about it in Vancouver

 

[Jet]

Honestly. Had no idea what it was an anagram for.



Boy, were really stretching this threads premise in considering minor league ramifications IF Phoenic loses the Coyotes, and IF Winnipeg secures the franchise for 2011-12 huh?. But anyway.....why move the Heet from Abbotsford to Vancover & the Moose into Abbotsford?. Just move the Moose to the Pacific Coliseum. And ya, your right about Chilliwack. Not a chance. Abbotsfords not that far away, and even they arent exactly breaking the bank through the box office, the jury still out as to whether or not they'll make it. Frankly, the only market out here that an AHL team would succeed IMO is Victoria. Forget about it in Vancouver

You're right about stretching the thread, I was thinking the same thing. The reason I said Moose to Abbotsford and Heat to Colosseum is people I think would be more likely to drive out to Abbotsford to see the Canucks farm team than to see the Flames farmhands. The draw of the Heat in Van would be an affordable option for families in Vancouver and Burnaby to watch pro hockey. Just spitballin. (PS last time I post OT in here, promise)