Dewey Ranch $212.5 million sale of Coyote's NHL hockey team denied

By Jennifer Lanning Drey

Portland, Ore., June 16 - Dewey Ranch Hockey, LLC's proposed $212.5 million sale of the Phoenix Coyotes National Hockey League team to PSE Sports & Entertainment was denied by the U.S. Bankruptcy Court for the District of Arizona, according to a Tuesday filing.

Judge Redfield Baum said he did not believe there was time before the purchase agreement's June 29 deadline to allow all of the issues surrounding the transaction to be fairly presented to the court.

Baum said the fact that the proposed sale would likely provide a material return to general creditors does not lessen the requirements under the bankruptcy code for the court to authorize the sale and/or the assumption and assignment of executory contracts.

The National Hockey League objected to the proposed sale because it was conditioned on the team being moved to southern Ontario.

The league had said granting the motion would "wreak havoc" in the professional sports industry, and that bankruptcy code was not intended to be used to cause such devastation to the economic benefits generated by these leagues.

In addition, the city of Glendale, Ariz., objected to the sale. Glendale advanced money for construction of the multi-use sports and entertainment facility used for the Coyote's games and had an agreement with the team that it would play all of its home games there through 2035.

The facility's concessions manager, Aramark, which also contributed to the building of the complex, objected to the sale as well.

In a subsequent statement, Jerry Moyes, principal owner of the Coyotes, said his priority was to work towards an "open and transparent sales process that will result in obtaining the most money for the team's creditors."

He added: "The case depends upon whether the NHL denies relocation under any circumstances and thus violates anti-trust laws, or specifies a relocation fee that is reasonable in this case."

The judge cited with approval cases involving relocation of other professional franchises, including the NFL Raiders from Oakland, Calif., to Los Angeles, Moyes said.

Moyes also said that the judge "soundly rejected" the positions of the NHL, NBA, MLB and NFL that allowing such sales in a bankruptcy proceeding would wreak havoc in professional sports.

Dewey Ranch and 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, and the Chapter 11 case number is 09-09488.

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