Phoenix XXVIII: Lawyers, Bonds and Money

[Dado]

The only reasonable explanation is that CoG doesn't actually want this deal to complete.

 

[Whileee]

Whether they were naive, underestimated the resolve of GW, or planned to ram it through at the last minute in a deluge of "recently released" paperwork, maybe all three, who knows?. Why they didnt seek a courts opinion in December, missing that opportunity; then again in January; missed again; February, yepp, slipped right by; is just nonsensical to my untrained legal mind, given the time (months) they've had to craft the deal and execute,

Though their strategy does make a bit of sense if they are not all that confident of their legal position... sort of whistling by the graveyard.

In fact, I think that all of the PR bluster might have been like one of those lizards flaring the neck to try to get the GWI to back off, rather than trying to alter the deal or get a declarative judgement on the legal merits. But who really knows why the COG does things the way they do?

 

[Killion]

Needless to say..heads should be rolling all over the desert when this is done.

Indeed, but they wont be. Right out of the shoot, Ive just had to scratch my head in wonder at Ed Beasley & Tindall, both of whom, IMO, shouldve been fired when Reinsdorf left the scene. They've got opinions from several highly respected law firms who have purportedly vetted the documentation, issuing opinions that the deal is kosher; theyve employed CBRE to back its parking studies and projections, bolstering further its enforceable opinion options. Yet here we are, about 4 weeks from the close of the season & the things unravelling faster than a cheap suit, and the 2 lead COG reps' are "on holiday"?.

 

[cbcwpg]

Forget why the CoG is trying to do what they are trying to do and what it will cost... does anyone have any idea how much it has cost the CoG to just get to this point?

- lawyer fees
- pens
- paper
- shreaders
- envelopes
- stamps
- coffee
- just time

 

[Killion]

The only reasonable explanation is that CoG doesn't actually want this deal to complete.

Exactly. It gives rise to all kinds of speculation & theories, none of which are in the least bit complimentary. I mean, is this all just a game staged by the COG & the NHL to give off the right appearances' or are they serious?. How do you square such seeming incompetence?. Why didnt they just hit it out of the park last December before it grew legs, went all jiggy on them like Whileee's Lizard?. The damn things had more than enough time to have hatched dozens of babies all of which are now running out of control; on a SW Air 767 out of Sky Harbor, at 5000' & full of people no less......starring Samuel L.Jackson...oh, never mind.

 

[Donwood]

The only reasonable explanation is that CoG doesn't actually want this deal to complete.

Have you ever seen a Glendale council meeting? Pure stupidity certainly is possible. Although that just the mayor and council, not much excuse for the city lawyers.

 

[Grumpz]

Exactly. It gives rise to all kinds of speculation & theories, none of which are in the least bit complimentary. I mean, is this all just a game staged by the COG & the NHL to give off the right appearances' or are they serious?. How do you square such seeming incompetence?. Why didnt they just hit it out of the park last December before it grew legs, went all jiggy on them like Whileee's Lizard?. The damn things had more than enough time to have hatched dozens of babies all of which are now running out of control; on a SW Air 767 out of Sky Harbor, at 5000' & full of people no less......starring Samuel L.Jackson...oh, never mind.

You lost me at hello.

 

[Coach]

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 if your going to admit you were mistaken then you just took away all the fun.

 

[blues10]

Forget why the CoG is trying to do what they are trying to do and what it will cost... does anyone have any idea how much it has cost the CoG to just get to this point?

- lawyer fees
- pens
- paper
- shreaders
- envelopes
- stamps
- coffee
- just time

How can you forget the consultants? The Walker Report and Mr. Hocking and his rather large fee for his in depth 12 page parking analysis.

 

[Ernie]

If Hulsizer is so certain that the deal is legal, why doesn't HE also underwrite the bonds?

If it is decided that the city can't back them with taxpayer dollars, then he can step in and back them with his own cash.

If the deal is above board like he says, shouldn't be a problem, right? right?

 

[Jarqui]

This will not be of interest to everyone and I apologize for the lengthy post.

Thanks for that

 

[XX]

If it is decided that the city can't back them with taxpayer dollars, then he can step in and back them with his own cash.

What is Glendale's incentive to do a good job of monetizing the parking in that situation?

 

[Jarqui]

http://www.atr.org/?content=031611GlendaleA&utm_source=twitterfeed&utm_medium=twitter#

Ah yes, the GOP lobbyists weight in!
http://www.rightwingwatch.org/content/americans-for-tax-reform
The group is led by Grover Norquist, described by the Wall Street Journal as the "the V.I. Lenin of the anti-tax movement." He is renowned in right-wing and Republican circles for his ability to unite the various right-wing interests into coalitions to achieve a common goal.

 

[RAgIn]

http://www.atr.org/?content=031611GlendaleA&utm_source=twitterfeed&utm_medium=twitter#

Take a little walk through memory lane. End of last thread I wouldn't have said anything if I hadn't posted it.

Nothing like bringing the Republicans from D.C. into the picture, huh?

 

[Donwood]

If Hulsizer is so certain that the deal is legal, why doesn't HE also underwrite the bonds?

If it is decided that the city can't back them with taxpayer dollars, then he can step in and back them with his own cash.

If the deal is above board like he says, shouldn't be a problem, right? right?

Right or if Bettman is so sure, why doesn't the NHL?

 

[Major4Boarding]

OMG, the guy they quote is an insurance defense lawyer from a 20 lawyer firm in Fargo, ND!!! You do realize that the CoG has Snell & Wilmer (Arizona's largest law firm), Fennemore Craig (Arizona's oldest law firm) and Greenberg Traurig (one of the largest US law firms) as counsel who have all opined (and put their butts on the line) that this deal does not violate the Gift Clause.

It's not the size of the firm that matters. The law is the law everywhere ( with respect to pursuing it ), and a lawyer in a small firm is no less capable than a lawyer in a large firm. The only difference is the big firm will charge you more for the same service.

Unfortunately goyotes, sometimes that amount of "firepower" doesn't necessarily translate into a slamdunk victory for a client(s), even if they put "their butts on the line".

I use Atlanta Spirit as an example and their hiring of King & Spalding in their "divorce" from Steve Belkin and the subsequent malpractice suit that followed. K&S has been around for 125 years, founded in Atlanta, is Atlanta's oldest law firm, and has a plethura of offices domestically and internationally.

Rather large wins under their belt, as in Chevron , Trade AM Int'l , and Verizon... and others. A landmark loss Hishon v King and Spalding , and have had some other rather significant issues recently:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFAl2NBnZ1kE
http://www.businessweek.com/news/2010-12-21/ex-glaxo-lawyer-seeks-king-spalding-files-in-case.html
http://abovethelaw.com/king-spalding/
http://www.patentlyo.com/patent/2010/02/attorney-ethics-disqualifying-a-law-firm.html
http://www.law.com/jsp/article.jsp?id=1202423885428&slreturn=1&hbxlogin=1

 

[RAgIn]

Coyotes deal could be delayed until after season

Was this posted earlier? If not, here goes:

The end-game, however, might not be revealed until after the National Hockey League playoffs are concluded or the Coyotes season is over.

The city of Glendale, with the help of NHL-recruited bond investors, could still sell the bonds despite the lawsuit. That could happen soon if the city and NHL have bond buyers lined up, according to sources familiar with the deal. That could keep the team in Arizona, and as soon as a bond sale happens, Hulsizer would be given money needed for him to buy the team.

Nothing really new here, but you can circle April 8 (last home game) and or April 9 (last reg. season game) on your calendars. If they are indeed relocating though, wouldn't be nice for the NHL to proclaim that fact soon, so fans and the team can have a little send off? Most teams of done this before, in history. IMO.

http://www.bizjournals.com/phoenix/news/2011/03/16/coyotes-deal-could-be-delayed-until.html

 

[LeftCoast]

Exactly. It gives rise to all kinds of speculation & theories, none of which are in the least bit complimentary. I mean, is this all just a game staged by the COG & the NHL to give off the right appearances' or are they serious?. How do you square such seeming incompetence?. Why didnt they just hit it out of the park last December before it grew legs, went all jiggy on them like Whileee's Lizard?. The damn things had more than enough time to have hatched dozens of babies all of which are now running out of control; on a SW Air 767 out of Sky Harbor, at 5000' & full of people no less......starring Samuel L.Jackson...oh, never mind.

Thinking about it, there is one other plausible explanation for CoG's strategy.

It's possible they are/were 100% confident and have sound legal opinions on the compliance with the gift clause, but there is something else, either with the current deal on in their past that they are hiding that would come out in litigation or with more public disclosure. So they tried to negotiate with GWI while resisting release of documents and full disclosure on the details of the deal.

 

[Ernie]

What is Glendale's incentive to do a good job of monetizing the parking in that situation?

well, he'd only have to underwrite them if the court decides Glendale can't.

basically, if Hulsizer is right in that the rights are worth $100m, or that it's legal for Glendale to underwrite them, he wouldn't have to pay a cent. Seems like a pretty safe situation for him (if he actually believed his own rhetoric).

Thinking about it, there is one other plausible explanation for CoG's strategy.

It's possible they are/were 100% confident and have sound legal opinions on the compliance with the gift clause, but there is something else, either with the current deal on in their past that they are hiding that would come out in litigation or with more public disclosure. So they tried to negotiate with GWI while resisting release of documents and full disclosure on the details of the deal.

with everything that's happened in the last two years, I'd say incompetence is the most likely answer.

 

[Dado]

Yep, a skeleton in the closet would certainly qualify as a reason to self-destruct the deal rather than moving forward.

And I've heard tell that politicians, especially grubby local ones, have been known to have a couple...

 

[Fugu]

This will not be of interest to everyone and I apologize for the lengthy post. I could not resist taking a quick trip through the BK docket to determine where the parking rights issue stands. I tried to take the legalese out so it would be easier to read, as such, I acknowledge that not everything presented here is as accurately described as it could be.

8/25/10 Moyes submits motion for Amended Plan.
The Motion pushes out the estimated rejection date from June 30, 2010 to June 30, 2011 provided that Moyes receives lower rate for damages. Or put simply, he wont reject the Glendale Contracts as long as they lower the amount he has to pay if they are rejected.

9/13/10 Moyes motions to re-estimate the damages for rejecting Glendale Contracts

10/6/10 Baum signs order to estimate claims.

11/3/10 At Hearing, Counsel Kroop advises the court that there has been positive negotiations between Moyes, Glendale, and NHL. There is an agreement in principle to submit an Amended Plan.

12/1/10 Motion to Approve Amended Plan, including language that Glendale Contracts can be assumed and assigned or rejected until June 30, 2011 as per a Transition Agreement between the Moyes entities and the NHL entities.

2/21/11 Moyes declaration in support of Amended Plan

2/23/11 Hearing on Amended Plan

2/24/11 Order approving Amended Plan by Baum.

Note: The amended plan does convey to the City of Glendale the rights under Agreement for the Replacement of Temporary Parking, dated as of July 1, 2008. However, this is not an agreement that involves the rights to parking. It is the agreement that requires Ellman to build a garage. Not coincidentally, after the city received those rights they cut a deal with Ellman to split the $25MM in escrow that was set aside to build the garage.


In the end, per the Moyes and NHL agreement, the parking rights are still sitting out there in the Glendale Contracts awaiting to be assumed and assigned or rejected. Did the NHL leverage their civil suit against Moyes in order to obtain the transition agreement? If the Hulsizer deal closes and Goldwater sues, how will a judge view the assumption, assignment, and subsequent $100MM payment? It will be very interesting to see.

If I'm reading this correctly, wouldn't Moyes and CoG be better off if he rejected the contracts, thus reverting the rights to CoG? Glendale now has an asset they're valuating at $100m, and Moyes gets consideration for damages to Glendale by rejecting the lease agreement. Since this matter is strictly between Moyes and CoG (the team was sold separately), it needs only to involve these two entities in the final analysis.

Moyes has more at stake with Glendale than the potential suit from the NHL, so in that sense the NHL shouldn't have as much leverage. (Unless the NHL's claims of $60-70m is greater than Glendale's claim, but I'd be surprised).

 

[Coach]

It seems the GWI is sharing more information with the Canadian media then they care to share with the Phoenix-based media. As of last night, their position was they would sue after the deal closed.

Exactly how are they going to know the bonds have sold in a private placement? I'm asking a serious question because I don't know the answer. Who is going to tell them the bonds have sold and the deal has been signed? Where do they get this information and how much lead time do they have? How do we not know the bonds didn't sell today? And if the intent is to protect the taxpayer, wouldn't they seek to enjoin the sale of the bonds at an inflated interest rate, and not the purchase of the parking rights for which the bonds were sold to buy?

i'm wondering if you were an investor would you invest in these bonds if they were paying somewhere between 7 and 9% interest knowing that Goldwater is sueing?

 

[Dado]

So that's what's holding up the deal....they're rapid-aging paper stock to back-date a new transition agreement...

 

[Donwood]

http://sports.espn.go.com/nhl/news/story?id=6225855

Edit: Burnside: Bonds moving ahead

 

[RAgIn]

In spite of advanced rhetoric from the Goldwater Institute, there remain signs that the municipal bonds crucial to the sale of the Phoenix Coyotes to Chicago businessman Matthew Hulsizer are edging closer to completion.

Multiple sources told ESPN.com Wednesday that the bonds, needed to generate $100 million that will go toward the purchase price of the team from the NHL, were moving forward, in spite of a press release issued late Tuesday by the Goldwater Institute saying the public watchdog group would file a lawsuit against the City of Glendale if the deal does close. The Goldwater Institute has claimed for weeks that the lease agreement with Hulsizer breaches state law while the City of Glendale and Hulsizer insist the deal is legal.

Well, if he's talking to Pierre LeBrun, and or his sources, there's nothing really new here.

NHL Deputy Commissioner Bill Daly said at the completion of the NHL general managers' meetings in Florida he hopes the bond sale will go through.

"I think it's too early to tell. I hope so," he said.

As for the latest press release from the Goldwater Institute, Daly said it contained nothing new.

"I think it's more of the same from Goldwater," Daly said. "I don't think it's really a big change of position. They've been trying to chill this deal from the start."

There goes the word "hope", again. Yikes.