Court back in session in Phoenix Coyotes bankruptcy case

The battle for the bankrupt Phoenix Coyotes is officially down to BlackBerry billionaire Jim Balsillie and the NHL.

Canadian billionaire Jim Balsillie arrives on Thursday at Federal Court in Phoenix for the Phoenix Coyotes bankruptcy hearing.

Canadian billionaire Jim Balsillie arrives on Thursday at Federal Court in Phoenix for the Phoenix Coyotes bankruptcy hearing.

PHOENIX — The battle for the bankrupt Phoenix Coyotes is officially down to BlackBerry billionaire Jim Balsillie and the NHL — and both may see their bids rejected.

Judge Redfield T. Baum pointed out in Thursday’s hearing that a sale isn’t guaranteed to come from Friday’s auction.

“There’s third possibility here — no sale,” said Baum. “It’s more than theoretical. You all ought to keep that in mind.”

Baum reaffirmed the bids from the two parties early in the hearing and asked if there were any other offers to be considered in the auction.

No one else stepped forward.

Bettman and deputy commissioner Bill Daly arrived to the courtroom early and took a seat two rows from the front.

Balsillie showed up 10 minutes before the hearing began and sat across the aisle from his NHL counterparts.

The league and Balsillie’s company PSE each confirmed their bids at the beginning of Thursday’s session.

The NHL’s offer was subject to some tough questioning from the judge.

“I can’t approve a bid I don’t understand,” said Baum.

He clarified that only US$2 million in cash is guaranteed to go to the estate from the NHL bid and argued that the league should not be able to select which creditors get paid, a component of the league’s current bid.

Balsillie’s is the highest bid, as much as $242.5 million, and is contingent moving the Coyotes to Hamilton. He upped his offer last weekend by extending the city of Glendale the opportunity to take $50 million in exchange for a release from the team’s 30-year lease at Jobing.com Arena.

The NHL has offered $140 million and intends to keep the Coyotes in the desert for now.

Baum’s job is to award the franchise to one of the two parties after Friday’s auction but it’s not known in if he’ll make that decision right away. Any ruling he makes is expected to be appealed by the losing side, and he may wind up turning down both proposals.

Former CFL commissioner Tom Wright was the first on the stand to give testimony. He prepared Balsillie’s relocation application back in June and filed a declaration claiming that he believes the NHL will never work in Glendale.

During Wright’s time on the stand, NHL lawyer Shep Goldfein dropped a couple details about the Ice Edge Holdings bid that officially dropped out of the auction on Wednesday.

First, he said Argos owners David Cynamon and Howard Sokolowski were part of that group before revealing that coach Wayne Gretzky was involved as well, having agreed to a pay cut from $8 million to $2 million. Ice Edge is still hoping to purchase the team down the road and keep it in the desert.