A Different Kind of Punch

OK, I was looking for a home run right cross. Instead Team Balsillie got nailed by a straight left jab.

The NHL never got a hearing on having Jimberry excluded from further participation in the process. Even though Gary Bettman was in the courtroom and poised to testify, the league's motion to exclude Balsillie was never fully vetted. Instead it will be dealt with at a September 2nd hearing.

The blow that staggered Balsillie's bid came instead from lawyers for MSD Capital, the Coyotes largest (and one of only two) secured creditors. MSD announced they had reached an agreement with the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group on a restructure and repayment of MDS' substantial and secured loan to the Coyotes.

Don't underestimate the importance of this agreement. As one of two secured creditors (the NHL is the other) Judge Tom has looked to MSD for their position and agreement. One of the reasons he has been loathe to excuse Balsillie from the proceedings is that his first duty is to the creditors of the Coyotes with secured creditors receiving the highest priority. Without a viable alternative to Balsillie, the Court had to keep that option open. It put pressure on the Reinsdorf group to make a deal.

That void has now been filled. And now as Reinsdorf+ looks to bring negotiations with the City of Glendale to completion, their bid is gaining more legitimacy in the eyes of the court. Once a Glendale deal is struck, it will be much easier for The Judge to excuse Mr. Balsillie from further participation.

That's exactly what the NHL wants. They will be back in full force on September 2nd. They would like nothing better than to drive a stake through Mr. Balsillie's heart.

Judge Tom gets what he wants too. He would simply prefer that people and the situation work itself out rather than have him rule on lofty matters like ownership approval and franchise relocation. Bankruptcy courts (and judges) seldom stray beyond their corner of the law. He has sent plenty of signals to their participants. It's their job to pick up those signals and act accordingly.

So on September 2nd, we'll be back for more fun with the expectation that the Reinsdorf's will have their dealings with Glendale in order and the full support of the creditors committee. That will make it easy for the courts to excuse Mr. Balsillie. And to those who asked, Balsillie really has no anti-trust grounds to sue on because he hasn't incurred any damages. Another reason the NHL wants him out and out now.

The longer this spitting contest goes on it's looking a lot like a 7-5 hockey game. Not exactly an artistic success but we'll take the two points. And after the game, we'll all be talking about how we can build on a very ugly win.