The Business of HockeyDiscuss the financial and business aspects of the NHL. Franchise sales, valuations, TV contracts, ratings, expansion, relocation, the CBA and work stoppage discussion goes here.
Well at least we will have an indication as to what it would have taken to satisfy Glendale for damages.
Would the Judge be able to consider that against the Balsillie bid?
The judge will consider what the creditors say. If all the creditors support the Reinsdorf offer the decision is easy. It is possible, if not likely, that Moyes and the unsecured creditors may side against the offer in which case the judge will have to make a decision one way or another. The big question mark is really what will (and can) the city do and whether they will do enough to appease the Reinsdorf group. If they don't/can't then Reinsdorf will just pull his bid and there are no other offers so the sale process will go to the relocation phase. We'll probably know more in the next week or so when they creditors make their opinions on the offer known.
But Balsillie spokesman Bill Walker believes for the first time the parties will be able to compare competing bids.
"The playing field definitely levels because Jim Balsillie is the one who has been out front on this. He is the only one whose bid has been publicly known. Once the other bidders go from speculative to fact, then the playing field levels because people can scrutinize those other offers in the same context as Jim Balsillie's."
“The Goldwater Institute’s assertion that the city has said in numerous media reports that the city plans to offer tax payer subsidies to potential new owners of the Phoenix Coyotes is incorrect. The city has stated that appropriate and legal modification of the existing arena-use agreement may be necessary. Any modification must be approved by the City Council, which will be done in open session and in accordance with law,” the city statement said.
Until we really know the details behind this statement, I wouldn't necessarily see this as a negative for the creditors. Oftentimes this can mean removing a claim from the creditor pool for some larger future consideration.
Example: there are articles/rumors suggesting Reinsdorf wants Gretzky out if he becomes the new owner. According to the court filings TGO is owed ~$8m in deferred compensation that would be in the bankruptcy creditor pool. He's also owed ~$16m over the next two seasons on his contract.
There's a possibility the court could void his contract on ownership transfer of the team and put that future $16m into the creditor pool with the original $8m where he'd only receive a % on it. If Reinsdorf truly wants TGO off the team, there's room for the two sides to negotiate a settlement and wipe that all out.
how does he deal with loss of rents if Reinsdorf can move in 1 or 2 years of losses?
That's a good question. I believe it is not part of this case.
If they want to break the lease in the future, the team will either have to pay any liquidated damages negotiated in the lease or seek arbitration in court at that time, if they have a winnable case
If Reinsdorf truly wants TGO off the team, there's room for the two sides to negotiate a settlement and wipe that all out.
Hypothetical: is the Judge likely to approve such an arrangement if a second bidder comes in and offers exactly the same money, terms, etc, with the exception of making TGO whole on both deferred compensation and contract buyout?
Or put another way - would Gretzky be opening the door to anti-trust if he waives all or some of his claim in the presence of an otherwise identical offer that pays him everything he's owed?
the judge has pretty much told the city that they won't get full payment of their lease (Reinsdorf's offer won't either). A fair payment might be one year of lease costs which might account for $10-20 million depending on whether they include parking revenue or not. .
surely Baum will want to see the renegotiated contract with any out clauses first- so will the Goldwater people
Baum absolutely will want details. GI, I think Baum could care less about. Baum's job is to protect the best interests of all creditors. GI focuses only on the city. If Baum thinks the deal adequately protects the interests of all creditors, he approves.
but if there is a clause such as the one that Nashville supposedly has with attendance goals and revenue goals, that allows Reinsdorf to leave, in say two years to go to hypothetically, Kansas or Vegas- how does that protect COG as a creditor- it would seem to me he would say you can't argue to uphold the whole lease against Balsillie then give get out clause to Reinsdorf- if Balsillie had get out clause he might stick it out in the desert for a couple of seasons
Hypothetical: is the Judge likely to approve such an arrangement if a second bidder comes in and offers exactly the same money, terms, etc, with the exception of making TGO whole on both deferred compensation and contract buyout?
Or put another way - would Gretzky be opening the door to anti-trust if he waives all or some of his claim in the presence of an otherwise identical offer that pays him everything he's owed?
I don't think Gretzky or anyone else "settling" a personal contract outside of a court proceeding would have a negative conotation whatsoever. The money is owed him, and unless coercion could be proved, a settlement would be applauded...I think.
but if there is a clause such as the one that Nashville supposedly has with attendance goals and revenue goals, that allows Reinsdorf to leave, in say two years to go to hypothetically, Kansas or Vegas- how does that protect COG as a creditor- it would seem to me he would say you can't argue to uphold the whole lease against Balsillie then give get out clause to Reinsdorf- if Balsillie had get out clause he might stick it out in the desert for a couple of seasons
I think that's another fight, in another court, for another day. Especially if the COG gives the thumbs up. Ultimately, it is the one taking the risk here -- remember, Moyes/Balsillie went the bankruptcy route believing the COG wasn't owed a single solitary cent!
I don't think Gretzky or anyone else "settling" a personal contract outside of a court proceeding would have a negative conotation whatsoever. The money is owed him, and unless coercion could be proved, a settlement would be applauded...I think.
why will any unpaid creditors accept a lesser deal if they can get paid out with another offer and how can a judge say no if the deal pays more debts off what is his legal mandate in the issue that way if said creditors say no to a deal.
It appears the new offer is no sweet deal meant to keep Coyotes safe forever either so whats better now?
basically it is coming down to- what is COG going to get should Balsillie be the one ( Baum and creditors reject Reinsdorf)- will Baum agree with Moyes that of the $300 million he sunk in $100 million ( or a portion thereof) should be given to him through the auction process.
A) is Moyes a creditor
B) what are damages for COG
So it will be fascinating to see if and where Baum draws the line. The NHL may well feel it's justified to continue campaigning to retain its powers to designate franchise ownership, but bankruptcy is about creditor interests, not league constitutions. The puck still belongs to Baum.
basically it is coming down to- what is COG going to get should Balsillie be the one ( Baum and creditors reject Reinsdorf)- will Baum agree with Moyes that of the $300 million he sunk in $100 million ( or a portion thereof) should be given to him through the auction process.
A) is Moyes a creditor
B) what are damages for COG
Well, Moyes and Balsillie claim the COG, per the original APA, is owed nothing. Interesting to see if he gets the opportunity to bid again what he includes up front in his bid for the COG. What's your guess?
i dont think all are some might but some are against as well depends on where you will line up when money comes
Agree with you here. The bankruptcy filing forced the creditors to protect themselves. Not so much that they're siding with Moyes who, at most, is an unsecured creditor. More they're fighting to protect themselves in the pecking order of who gets paid first and at what level.
Well, Moyes and Balsillie claim the COG, per the original APA, is owed nothing. Interesting to see if he gets the opportunity to bid again what he includes up front in his bid for the COG. What's your guess?
i think judge baum will now receive a series of motions by parties seeking clarification and determination on numbers such as
$ amount to relocate
$ amount to COG should relocation take place
terms of out clause in any negotiation to COG
declaration of unsecured creditors ( is Moyes a creditor or was his money equity)
Agree with you here. The bankruptcy filing forced the creditors to protect themselves. Not so much that they're siding with Moyes who, at most, is an unsecured creditor. More they're fighting to protect themselves in the pecking order of who gets paid first and at what level.
with Reinsdorf deal unsecured creditors left to fight it out over 28 million
i think judge baum will now receive a series of motions by parties seeking clarification and determination on numbers such as
$ amount to relocate
$ amount to COG should relocation take place
terms of out clause in any negotiation to COG
declaration of unsecured creditors ( is Moyes a creditor or was his money equity)
also i'm sure Rodier has some whoppers
Right. You are putting together a list that gets Balsillie to that ridiculous price range.
He needs to offer more than Reinsdorf's $148 million, plus at least something in the $200 million range for Glendale, then of course relocation fees and infringement fees.
Please note I used $200 million for Glendale because it pretty much covers the arena costs. Jake who is an attorney with bankruptcy experience has reviewed the agreement and has posted his opinion that the lease is airtight and he expects liquidated damages to be around $500 milion. If Jake is right, then Balsillie would be smarter to buy an NFL team because he would be paying enough to buy one.
I was not so much thinking even him how can all other creditors take less if they see a better offer if no long term deal to stay can be done is all , i know you and local fans want to keep team lets say things dont work or support and revenues just cant work what happens and judge partly must look at it and then decide what is best so if creditors say no what can teh judge do if anything then was kind of where i was going
Bbud, I will be absolutely shocked if creditors are not made 100% whole if a local bid is accepted, or their investments are not protected and guaranteed under a new deal. The only "creditor" I see losing on the deal is Moyes, because the league, new ownership, and the COG will argue before the judge that he is not a creditor.
And of course I want the team to stay here. What fan wouldn't fight with all their heart to keep their team? But the judge can't see into the future. He can listen to the arguments and make his best judgment.
As Billy Blaze said it comes down to the COG and Moyes: if they're both owed, who will pay the $244M debt claimed by Moyes, plus what is owed to the city, the NHL, Toronto and Buffalo? Mod: deleted.
Last edited by Fugu: 06-27-2009 at 08:43 AM.
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