Monday, June 15, 2009

Court Rules Against Balsillie

Judge Redfield Baum issued a ruling tonight from his Phoenix bankruptcy court that denied the request of the Balsillie camp to allow relocation of the Phoenix Coyotes to Hamilton, ON by the requested June 29th deadline that was imposed by Balsillie's attorneys. Judge Baum ruled that the June 29th date was a deal breaker because it did not allow the court sufficient time to decide the anti-trust claim raised by Balsillie's attorneys. In reading the ruling, the Judge also came back to a point he raised earlier in the hearings with Thomas Salerno, an attorney for Balsillie that questioned the desire of the Balsillie camp to "excise" the assign and assumption clause of the bankruptcy code. Specifically, he referenced existing contracts that Balsillie wanted to omit from consideration in his attempt to purchase and relocate the Coyotes. His ruling stated that as long as the contracts were valid and enforceable, which he believed the were, that said contracts should be honored. He specifically referenced the contract with the City of Glendale and with Aramark, the concessions vendor for the Coyotes. Judge Baum stated in his ruling that he did not believe that Balsillie could legally excise, or remove from consideration those valid contracts. He also noted that Balsillie had not made formal application to the NHL for the purchase and subsequent relocation of the Coyotes. This fact also weighed in his consideration. He referenced as well the rights of sports leagues to control their franchises and the rights of leagues to control relocations and receive compensation for relocating to certain markets. This case, at the outset, did not take those rights into consideration, an issue that was raised by Judge Baum in the hearings.

The ruling against Balsillie hangs on the tight deadline of June 29th, which the court has, rightfully so, said does not give it adequate time to sort out the complex anti-trust issues that have been raised. The ruling does indicate that the anti-trust provisions are not the sole issue that must be resolved, and their is serious consideration that must be given to existing contracts and the rights of the League to control franchises and their location, or relocation. I expect that we have not heard the last of this case or of Jim Balsillie and his attempts to procure an NHL franchise.

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