to sell the bankrupt franchise to the NHL.
The agreement, which still must be approved by Judge
Redfield T. Baum, was announced in U.S. Bankruptcy Court on Monday after
attorneys met for more than an hour during a recess in a status hearing on the
case.
Former coach Wayne Gretzky, who has a $22.5 million claim
in the case, has not agreed to the deal.
Moyes’ attorney says the decision to make a deal came
largely because the expenses of running the team in bankruptcy were being paid
from the league’s $140-million offer. Moyes was left with few options after his
attempt to sell the team to Canadian billionaire Jim Balsillie was rejected by
the court.
NHL deputy commissioner Bill Daly says that once the deal
closes, the league will immediately look to sell the team, preferably to an
owner who will keep the club in Arizona.
The league hopes to close on the sale on Nov. 2.
“Obviously, the pieces fell into place,” Daly said after
the hearing. “The focus now has to shift to getting the club out of bankruptcy
and finding a new owner. I’m pleased with the outcome today.”
Daly confirmed that NHL officials, including commissioner
Gary Bettman, met on Monday with representatives of Ice Edge, a group that has
said it plans to keep the team in suburban Glendale. Daly said other potential
buyers have also expressed interest, but he didn’t identify them.
The agreement between the NHL and Moyes is expected to be
submitted to the court as early as Tuesday.
After an NHL attorney outlined the agreement in court,
Baum said he would wait to see a copy before commenting. “I’ll read it when I
get it,” Baum said. “I don’t think I can say anything more about that.”
The judge set a Friday morning deadline for objections
from other creditors, and said he would hear objections on Nov. 2.
The case has generated more than 1,000 pages in court
filings and considerable rancor among the parties. But attorneys were ready to
make a deal when Baum called a recess during the status hearing on Monday
afternoon.
Clutching pens and legal pads, about a dozen attorneys
huddled in the center of the courtroom, then broke into smaller groups to
confer.
When the recess ended, NHL attorney Greg Milmoe kissed
Carolyn Johnson, Moyes’ attorney, on both cheeks.
Moyes took the team into Chapter 11 on May 5 with a plan
to sell to Balsillie, contingent on moving the franchise to Hamilton, Ontario,
which the NHL vehemently opposed.
Last month, Baum rejected outright Balsillie’s offer to
buy the team for $242 million and move it to Canada. The judge also turned down
the NHL offer but he left the door open for the league to purchase the franchise
if it amended its bid to treat Moyes and Gretzky, the ex-coach, more favorably.
Monday’s agreement is essentially the same as the NHL’s
original bid.
“Clearly, from an understanding, it remains unchanged,”
Daly said.
What did change was Moyes’ realization that the amount
of money available to him was dwindling with each withdrawal to meet payroll and
other expenses. The next withdrawal, about $2.6 million, will come this week.
“That’s coming out of our mouths,” Johnson said. “That
certainly was pressure to settle.”
Moyes says he loaned about $100 million to the
franchise, but he stands to recover perhaps only a fraction of that amount.
Moyes left the court without speaking to reporters.
Asked if Moyes was happy about the deal, Johnson replied, “Nobody’s happy about
losing that much money.”
Attorneys said the offer is worth about $128 million.
The agreement would provide the nearly $80 million that
is owed SOF Investment, the largest secured creditor, and the NHL would get the
$37 million it is owed for funding the team since last fall.
Between $9 million and $11 million would be available to
be divided between Moyes and Gretzky.