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NHL, Coyotes owner ordered to mediate

Source: Agencies | May 21, 2009, Thursday | Print Edition

THE National Hockey League and the owner of the bankrupt Phoenix Coyotes must seek mediation to settle their differences on who controls the hockey team, a federal bankruptcy judge ruled on Tuesday.

"Let me make a partial ruling," Judge Redfield Baum said in US Bankruptcy Court in Phoenix. "The court is ordering the parties to attempt to go mediate the control issue.

"The court expects the two parties to pursue that as quickly as possible," he added.

The Phoenix Coyotes filed for bankruptcy in Arizona on May 5 in a move intended to facilitate a sale and a move to Canada.

The NHL has sought to overturn the bankruptcy filing by club owner Jerry Moyes, arguing he did not have the authority to file because the league controlled the team.

At the time of the filing, trucking magnate Moyes said he had an offer to sell the Coyotes to Jim Balsillie, co-chief executive of Canadian smartphone maker Research in Motion, for US$212.5 million.

Balsillie has said his offer is contingent on moving the team to southern Ontario.

The bankruptcy judge, who ordered a report from the two sides on May 27, said it was necessary to settle the issue of the team's possible relocation before a sale could be addressed.

"We will certainly do what the judge has asked and we will put every ounce of energy that we have into making it work," Steve Roman, a spokesman for Moyes said.

NHL Deputy Commissioner Bill Daly said the league's attorneys would talk to Moyes' lawyers.

"I will go in with an optimistic view that cooler heads can prevail and that we can come up with some way to manage this team that will preserve the asset," he said.

The Coyotes joined the NHL as the Winnipeg Jets in 1979, after the World Hockey Association folded. In 1996, the team moved to Phoenix and renamed itself the Coyotes. In 2001, it was sold to a group that included Moyes, who assumed majority control five years later.

Moyes disputed the league's contention that he turned over control of the Coyotes last November in exchange for financing.

In a separate filing, Earl Scudder, an attorney who has advised Moyes, claimed NHL Commissioner Gary Bettman told him April 3 the league would not approve relocation of the Coyotes to Hamilton, Ontario, because the city's arena is too old.

Bettman said if the team returned to Canada, it would be to Winnipeg.

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