I have never seen quite a legal circus as the Phoenix Coyotes Chapter 11 Bankruptcy hearing this afternoon…
The hearing was pretty much the start of a long couple of weeks for the Phoenix Coyotes and their fans, the NHL, the City of Glendale and the numerous other business represented at the hearing.
While the NHL and Phoenix Coyotes seemed mostly in agreement on how the next few weeks will proceed (outside of who is actually in charge), the one real source of contention to several of the motions, was the City of Glendale.
And who is to blame them? The City of Glendale, it turns out, is owed over $2.5 million by the Phoenix Coyotes for their portion of ticket sales from each Coyotes home game. In accordance with the lease between the Coyotes and the City, the Coyotes are to pay $2.60 per ticket sold at the arena. This $2.5M owed to the City of Glendale is neither a secured or unsecured loan. It is rightfully their money, that the Coyotes are legally obligated to pass along to the City after each game.
The second point of contention by the City of Glendale is that per the lease, the team is required to play hockey in Glendale for another 26 years. Their argument is based on a similar ruling with the Pittsburgh Penguins, that the lease is “non-discharged” and the team should not be allowed to move from Jobing.com Arena per their agreement.
Other than that though, the NHL and the Phoenix Coyotes representation seemed in agreement over how the next few weeks will proceed. In fact, the NHL had not yet filed a motion contesting that they are rightfully in charge of the Coyotes, though the NHL did state that they planned to file a motion by the end of the day.
PSE Entertainment, the group headed by RiM CEO, Jim Balsillie, stated that they “put a legitimate offer on the table” and that they “wanted a resolution by June 22nd, prior to the NHL draft.”
So what you should take away from today’s hearing is basically this:
- The NHL and Coyotes are still fighting over who will represent the team
- The City of Glendale is owed $2.5M and will get their money before any of the secured or unsecured lenders
- The City of Glendale will argue and fight to keep the team in Phoenix
- PSE Entertainment’s offer is the first, but probably not the last offer to purchase the team that will come up in the next few weeks.
The next defining date to throw out on your calendar will be May 27th. That is when the final hearing on all of the interim motions will take place.













