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Judge Baum orders another hearing in Coyotes bankruptcy case

Canadian billionaire Jim Balsillie arrives Thursday, Sept. 10, 2009 at Federal Court in Phoenix for the Phoenix Coyotes bankruptcy hearing. THE ASSOCIATED PRESS/Matt York

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Canadian billionaire Jim Balsillie arrives Thursday, Sept. 10, 2009 at Federal Court in Phoenix for the Phoenix Coyotes bankruptcy hearing. THE ASSOCIATED PRESS/Matt York

There will be more arguments heard in court before Judge Redfield T. Baum decides who controls the beleaguered Phoenix Coyotes.

Baum has called an emergency hearing for Wednesday to give NHL lawyers an opportunity to present arguments against Jerry Moyes' request that the league be forced to mediate "key sale issues" in the complicated case.

It was expected that the next major development in the Coyotes saga would come in the form of a written ruling from Baum after he oversaw an auction for the team on Sept. 11 but he continues to ponder that decision.

Moyes, who placed the team in Chapter 11 bankruptcy back in May, asked for the emergency hearing in court filings last week after the NHL rejected his request for mediation. The judge granted the hearing on Monday.

The NHL team's former majority owner believes that a session with San Francisco-based mediator Antonio Piazza might produce the best possible result for creditors.

"Considering the amount of fees associated with continued disputes in this court regarding the sale process and what could be a protracted appellate process (depending on how the court rules), the debtors believe that a good-faith effort to arrive at a mediated resolution of the key sale issues would be in all parties' interest," the Moyes filing said.

The NHL and Glendale filed objections on Friday to any mediation. Balsillie's camp submitted a document on Monday in support of it.

The league believes there is nothing worth discussing.

"The NHL board of governors voted unanimously to disapprove Mr. Balsillie as an owner," the NHL said. "As a result, his qualification to become an owner is not something that the NHL can compromise, and it is not something the NHL is willing to mediate."

The issues Moyes would like to see resolved in mediation include the potential transfer of ownership to Canadian billionaire Jim Balsillie, the timing and feasibility of relocating the franchise to Hamilton and the fee owed to the league for such a move.

Baum has said in court that he would like to see the sides come together but doubted that it was possible after everything he had heard and read.

The judge has been mulling over Balsillie's bid of US$242.5 million and the NHL's offer of $140 million. He also raised the possibility that neither side might get the team.

At the auction hearing, the largest unsecured creditor (SOF investments), city of Glendale and the committee of unsecured creditors all spoke up in favour of the league's bid. Moyes was the lone party to back Balsillie.

Like the NHL, SOF opposes mediation, citing the franchise's continued financial losses as it awaits determination of its fate on the brink of the start of the NHL season.

"SOF is gravely concerned that any imposed mediation will unnecessarily delay the court's determination regarding the outcome of the auction and related issues, to the detriment of SOF and other creditors," the company said.

There remains no timetable for a decision on the matter, although Baum has said he hoped to make a ruling before the start of the regular season. The Coyotes are scheduled to play their first game in Los Angeles on Oct. 3.

Even after the end of the auction, court filings have continued - including a document from Balsillie's lawyers on Monday intended to strengthen his case.

The Balsillie camp filed a submission that suggests NHL teams hold veto rights over their home territory - something the league has denied in court - citing a recent interview with Ottawa Senators owner Eugene Melnyk on a Toronto radio station.

The veto issue was raised in the Coyotes case because Balsillie's bid for the team is contingent on a move to Hamilton - a city that falls within the Maple Leafs territory.

During Melnyk's Sept. 17 radio interview, he noted that he's not allowed to schedule an exhibition game for the Senators at his OHL team's arena in Mississauga, Ont., because it falls in Toronto's territory.

Balsillie's lawyers acknowledged the late timing of the filing, but noted that the admission "might affect which bid should prevail."

The league's board of governors voted 26-0 against Balsillie as an owner in July, questioning his character and integrity. The co-CEO of Research in Motion - the company that makes the Blackberry - has failed in previous attempts to buy the Pittsburgh Penguins and Nashville Predators.

Even as the team's fate continues to be debated in court, it continues to prepare for the season.

On Monday, the Coyotes hired Dave King as assistant coach and replaced goaltending coach Grant Fuhr with Sean Burke. Fuhr will remain in the organization and work with prospects.

The status of Wayne Gretzky remains unclear.

The team's head coach and managing partner has stayed away from training camp, leaving associate coach Ulf Samuelsson to run things in his absence.

-With files form The Associated Press.

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