PHOENIX — A group headed by Jerry Reinsdorf has pulled out as a potential buyer of the Phoenix Coyotes just as the NHL and a partnership of Canadian and American investors filed separate bids in U.S. Bankruptcy Court to purchase the team and keep it in Arizona.
The NHL announced its bid filing a few hours before word came that the investors’ group, known as Ice Edge Holdings, had met Tuesday’s court-imposed deadline.
Ice Edge chairman Keith McCullough said in a news release that the plan was to “revitalize NHL hockey in Arizona and the southwestern United States.”
Reinsdorf’s group said it was unable to meet the deadline for submitting a firm offer. It also complained of an “unwilling seller” and “an organized publicity effort designed to provide negative and misleading information to interested parties.”
The Reinsdorf group said in a statement that those tactics were a factor in the inability to reach an agreement with the city of Glendale on an acceptable lease to play in Jobing.com Arena.
Ice Edge officials spoke of a successful partnership with Glendale.
“In the last eight weeks we have worked with the NHL, the city of Glendale and members of the Coyotes organization to develop a solid plan for the successful operation of the Coyotes in Phoenix,” Ice Edge chief operating officer Daryl Jones said.
Ice Edge officials repeatedly mentioned working with Wayne Gretzky, the former hockey great who is the Coyotes coach and owns a small share of the team.
“The Phoenix Coyotes organization presents a number of great hockey and business opportunities,” Ice Edge CEO Anthony LeBlanc said. “We will build on the team’s brand, the Wayne Gretzky brand and a partnership with the city of Glendale to ensure that Arizona continues to enjoy the NHL for many years to come.”
The flurry of activity Tuesday leaves the NHL and Ice Edge as bidders that would keep the team in Arizona. Neither organization revealed the size of its bid. Earlier, Ice Edge said it was prepared to offer about US$150 million.
Canadian billionaire Jim Balsillie filed an amended purchase agreement on Monday offering $212.5 million, contingent on immediately moving the franchise to Hamilton.
If Judge Redfield T. Baum throws out Balsillie’s offer because the NHL board of governors rejected his application, by a 26-0 vote, to own the Coyotes, that could leave a choice of the NHL and Ice Edge offers.
Balsillie wants the judge to overrule the NHL’s vote based on bankruptcy law and the fact that he says his offer would provide the most money to creditors. His offer would give Coyotes owner Jerry Moyes $104 million of the $300 million he says he loaned the team.
The NHL and Ice Edge offers are expected to give Moyes little if anything, contending the money was lost equity not a loan.
LeBlanc used to work for Balsillie as vice president of global sales for Research In Motion, which makes the Blackberry. Balsillie is the company’s co-CEO. Jones has said the connection is a coincidence and has no bearing on the Ice Edge bid.
Ice Edge was a late arrival in the Coyotes case, but it said it filed a detailed bid that included “renegotiation of key debts and contracts, a revamped sales and marketing strategy and a more effective utilization and partnership with Wayne Gretzky.”
Ice Edge, which earlier had indicated it would have the team play a few games in smaller Canadian cities, also said it had reached an agreement in principal on a repayment plan with the Coyotes’ largest secured creditor, SOF Investments.
Deputy NHL commissioner Bill Daly said in a statement that if its bid is successful, the league intends to sell the team to a third party outside of the bankruptcy process.
Presumably, that could include the group headed by Reinsdorf, owner of baseball’s Chicago White Sox and the NBA’s Chicago Bulls.
“We believe this step is necessary at this time in order to best preserve and maximize the value of the club asset for the benefit of the club’s creditors and for the community of Glendale,” Daly said.
The move marks a significant shift in the NHL’s tactics. The league had backed Reinsdorf’s planned $148 million offer.
Daly said the NHL would “remain supportive of the other efforts that have been made and are being made to purchase and operate the Coyotes in Glendale.”
The Reinsdorf group said it had accomplished a great deal in its effort to buy the team.
“Our capital structure is negotiated, and we have negotiated acceptable deals with the secured creditors as well as a number of unsecured creditors,” the group said. “We have developed a solid business plan that would result in keeping the Coyotes in Glendale and in a relatively short period of time turning the team into a successful and viable NHL franchise.”
The group took a shot at Moyes, calling him “an unwilling seller” who “created an expensive litigious environment that has had the effect of chilling the negotiations with the city.”