SBD/October 10, 2013/Franchises

Failure Of NHL's Case Against Former Coyotes Owner Means Bad News For Owners, Bettman

Bettman has forced owners to pay the bills for money-losing league-owned franchises
A judge's decision last week that the NHL cannot recover most of the $145.9M (all figures U.S.) it was trying to get from former Coyotes Owner Jerry Moyes is "a nasty blow" to Commissioner Gary Bettman, "as he has long told the NHL's 30 owners they would not lose money on the Coyotes debacle," according to David Shoalts of the GLOBE & MAIL. The ruling from U.S. Bankruptcy Court Judge Redfield Baum last week could prevent former Coyotes minority owner and coach Wayne Gretzky from collecting $6.5M owed to him. Baum said in his decision that "federal bankruptcy law does not allow the league to recover any" operating losses. He also wrote that he "needs more information" about attorney fees and money paid to unsecured creditors "before he decides if Moyes is responsible for paying part or all of those claims." Baum's wording "indicated he is not inclined to rule in the NHL's favour." The ruling could "mean some awkward questions for Bettman at the annual governors meetings Dec. 9 and 10." Baum said that the consent agreement all NHL owners must sign, "in which they promise to finance all costs of a franchise, does not apply in a bankruptcy proceeding." This also is "a severe blow to Bettman, who has long used the consent agreement to force owners eager to escape the financial obligations of a money-losing franchise to keep paying the bills." However, NHL Deputy Commissioner Bill Daly in an e-mail wrote, "We do not have any long-term concerns about the enforceability of the various contracts that govern the league. ... The case is a long way from conclusion at this point. The ruling we got on Friday is just the first word on this particular claim" (GLOBE & MAIL, 10/10).
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