Balsillie takes it on the chin

LANCE HORNBY, SUN MEDIA

, Last Updated: 10:03 AM ET

What was billed as a fight-filled day in Arizona bankruptcy court yesterday gave way to one hard punch that could knock Canadian Jim Balsillie out of bidding for an NHL team in Hamilton.

The would-be owner learned that SOF Investments, owed in excess of $80 million US by the cash-crunched Phoenix Coyotes and the franchise's largest secured creditor, had shifted allies and reached a deal to support Jerry Reinsdorf's bid to keep the team in Glendale.

Reinsdorf, whose $148-million bid compares to $212.5 million by Balsillie, has the backing of the NHL.

Steven Abramowitz, attorney for SOF, told the court the deal included a "substantial buydown" of the $80 million with the rest rolled over into an ongoing debt.

Abramowitz urged the court to "do anything it can" to keep Reinsdorf's bid alive after a lawyer for Reinsdorf said his boss was losing patience with the complicated sale, which has been further clouded by Reinsdorf's battles with current owner Jerry Moyes, who favours Balsillie.

The final decision on a move is still pending a court auction on Sept. 10, and proceeds only if Balsillie fends off the NHL's claim he's unfit to be an owner and then if his bid is chosen by Judge Redfield T. Baum.

But though Balsillie's bid is more than $60 million higher than Reinsdorf's, it was SOF's initial deal with Balsillie that led Baum to keep the Canadians in the game.

SOF had not fully committed to Balsillie, but is now waiting to see if Reinsdorf can reach a deal with the Phoenix suburb of Glendale on a rink lease at Jobing.com Arena.

That is a contentious matter itself, with the city of Glendale determined not to let Moyes or the winning bidder out of the lease, which still has almost 30 years to run.

Reinsdorf has raised red flags with local officials in his quest to get millions in tax breaks.

The rest of yesterday afternoon and evening's court business was taken up with a tangled web of motions and depositions that Baum will sort through the first week of September before the auction.

Though NHL commissioner Gary Bettman was present early yesterday and ready to give his side in a key dispute -- that it's too late to move the team for the 2009-10 season -- Baum quickly put the show on hold, saying such testimony wasn't scheduled yet.

With some momentum in his favour after Baum's ruling earlier this month, Balsillie's lawyers want Bettman and NHL execs put on the spot to explain why they oppose his ownership.

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But Baum said the list was too long and the documents too difficult to obtain, suggesting he cut his requests to a manageable number.

One of those league governors the Balsillie group wanted questioned reportedly was Maple Leaf Sports and Entertainment Ltd. president Richard Peddie.

The Leafs and Buffalo Sabres are the two teams that would have their revenues threatened by an NHL team in Hamilton.

With training camp a month away, a hockey department decision on team travel needing to be jointly approved by the league and Moyes' lawyers also came before Baum yesterday.

The Coyotes have been using a small Moyes-owned company airline, but general manager Don Maloney and NHL deputy commissioner Bill Daly want the team to fly commercial.

-- with files from the Associated Press


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