Court decision could end Balsillie’s NHL dream

A decision by a U.S. bankruptcy judge in the blazing Arizona heat could allow Jim Balsillie to continue his pursuit of putting an NHL team in Hamilton, or test the cold resolve of the Canadian billionaire to fight the league in court.

Jim Balsillie

PHOENIX — A decision by a U.S. bankruptcy judge in the blazing Arizona heat could allow Jim Balsillie to continue his pursuit of putting an NHL team in Hamilton, or test the cold resolve of the Canadian billionaire to fight the league in court.

If Judge Redfield T. Baum decides during a bankruptcy court hearing Wednesday to ignore an overwhelming vote by NHL owners rejecting Balsillie’s bid to purchase the Phoenix Coyotes, it opens the door for him to participate in a Sept. 10 auction for the franchise.

But if Baum upholds the NHL’s vote, Balsillie will have to decide if he has the will and deep pockets to battle the league in an antitrust suit.

“It is certainly still open to him to bring such a lawsuit,” said Penn State professor Stephen Ross, a sports law and antitrust scholar.

Such litigation might take four years and cost more than US$10 million, Ross estimated. By then, the Coyotes could have a new owner and may not even be playing in Phoenix.

“Depending on who is owning the team and where they are, the remedy may be different,” he said. “A court could conceivably order the NHL to add another team (in Ontario) or give him the right to buy another team or may just award him money damages.

“But certainly, even if he loses in the bankruptcy court, he still has a viable antitrust claim under either Canadian law or American law.”

Eric Schaffer, a senior bankruptcy partner at the international law firm Reed Smith in Pittsburgh, believes if Wednesday’s decision goes against Balsillie it could convince the co-CEO of BlackBerry maker Research In Motion it’s time to give up the fight.

“If he loses on this one, then he probably is done as a potential owner,” said Schaffer, who was involved in the Pittsburgh Penguins bankruptcy case. “It means you have a court decision that says the NHL does not have to take him in under any circumstances.”

Both sides can appeal Baum’s decision, but Ross doubts another court would overturn the ruling.

“The district judge is given a substantive degree of latitude on factual matters and predictive matters,” he said. “It’s going to take a very strong basis to overturn the discretion of the bankruptcy judge on that matter.”

Balsillie has offered US$212.5 million to buy the Coyotes, a bid that is contingent on moving the team to Hamilton.

The NHL, which favours keeping the franchise in Phoenix for the time being, has bid $140 million.

The league made its surprising offer last week after Jerry Reinsdorf, who owns baseball’s White Sox and the NBA’s Bulls, withdrew his $148-million bid.

Reinsdorf walked away from the bargaining when he could not reach an agreement with the city of Glendale, the Phoenix suburb where the Coyotes play, to make the team viable in Arena.

The other bidder is Ice Edge Holdings LLC, a group of American and Canadian businessmen who plan to play five games in Saskatoon. Their offer is also contingent on reaching an agreement with Glendale.

The NHL owners voted 26-0 to reject Balsillie as an owner, saying he was perceived to be untrustworthy. Balsillie has also had failed bids to buy the Pittsburgh Penguins and Nashville Predators.

Ross said to win an antitrust case, Balsillie would have to prove the NHL objected to moving the Coyotes to Hamilton because they would be competition for the Toronto Maple Leafs and Buffalo Sabres.

If the NHL succeeds in buying the Coyotes, the league could sell the team to another owner who may relocate the franchise. It’s even possible Reinsdorf could make another offer.

The Coyotes have lost more than $30 million in each of their last three seasons playing in Glendale.

Schaffer said there is a chance Baum could allow Balsillie to participate in the auction.

“I think a judge might say the NHL does not have complete discretion to make a decision without having some basis to decide, that they can not be simply arbitrary,” he said.

“Remember, the judge is there to try and obtain the highest and best offer in the interest of maximizing distribution to creditors.”

Ross isn’t so sure, pointing out the court has rejected some of Balsillie’s earlier arguments.

“If the judge were sympathetic to Balsillie’s position, which is the NHL is behaving in a manner that is illegal under the antitrust laws and bankruptcy will not permit people to enforce rules that are illegal under federal law . . . he would have ruled in favour of Balsillie the first time,” Ross said.

Just Posted

PHOTOS: Red Deer College Queens host third annual Pink in the Rink game

The RDC Queens picked up an extra special victory on home ice… Continue reading

PHOTOS: The Mustard Seed CEO speaks at Seeds of Hope Gala in Red Deer

The first-ever Seeds of Hope Gala was held at the Red Deer… Continue reading

PHOTO: Renewable Energy Fair at Red Deer College

The Renewable Energy Fair and Workshops event was held at Red Deer… Continue reading

Person airlifted to hospital after collision near Innisfail

One person was airlifted to hospital after a serious collision west of… Continue reading

WATCH: Make-A-Wish grants Star Wars loving teen’s wish

The Make-A-Wish Foundation granted Anakin Suerink’s wish in Red Deer Saturday afternoon

‘Stupid’ law preventing Canada’s re-engagement with Iran: retired envoy

OTTAWA — The real reason the Liberal government hasn’t been able to… Continue reading

Voters head to polls for BC municipal elections today

VANCOUVER — Voters in British Columbia will head to the polls today… Continue reading

All sharks tagged in N.S. expedition can now be tracked on Ocearch website

HALIFAX — All six of the sharks tagged in Nova Scotian waters… Continue reading

Memorial service for former PQ minister Lise Payette today in Montreal

MONTREAL — Mourners will gather to remember former Parti Quebecois cabinet minister… Continue reading

Immunotherapy scores a first win against some breast cancers

For the first time, one of the new immunotherapy drugs has shown… Continue reading

‘Mom I’m in trouble:’ Canadian, Brit face 10 years in jail for alleged graffiti

GRANDE PRAIRIE, Alta. — The mother of a Canadian who was arrested… Continue reading

Coyote on the prowl near Penhold

This coyote was out on the prowl in a field just west… Continue reading

Most Read