Judge rejects both bids for Phoenix Coyotes, says NHL flaw fixable

By Caroline Salls

Pittsburgh, Sept. 30 - A bankruptcy judge has rejected both of the bids submitted to Dewey Ranch Hockey, LLC for the Phoenix Coyotes, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Arizona.

As previously reported, PSE Sports and Entertainment LP, which is led by James Balsillie, made a final $212.5 million bid for the team, which could have been increased if Glendale, Ariz., agreed to withdraw its objection to a sale to PSE.

The National Hockey League also participated in the auction held earlier this month with a $140 million bid.

Judge Redfield T. Baum said he denied the bid submitted by PSE because "the court struggles with how it can adequately protect the NHL's membership selection right and control over the home team location rights if the court were to allow PSE to move the Coyotes to Hamilton."

Meanwhile, although Baum said the NHL's bid is supported by plans to make a significant payment to general unsecured creditors and pay secured creditors in full, the judge said he is concerned about the terms of the bid that allow the league to select the unsecured creditors that will be paid in full.

"By the terms of the NHL bid, every dollar that the NHL elects to pay to an unsecured creditor reduces the remaining pot of dollars, on a dollar for dollar basis, for those unsecured creditors not selected for payment by the NHL," Baum said in his ruling.

However, Baum said it does seem that the defect in the league's bid could be easily cured.

"In hockey parlance, the court is passing the puck to the NHL, who can decide to take another shot at the net, or it can pass off the puck," Baum said.

Dewey Ranch Hockey, LLC, Arena Management Group, LLC, Coyotes Holdings, LLC and Coyotes Hockey, LLC are the owners of the Phoenix Coyotes National Hockey League team. The owners filed for bankruptcy on May 5. Their Chapter 11 case number is 09-09488.

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