Coyote Ugly: Court Battle Begins

The NHL went to court on Thursday challenging Phoenix Coyotes owner Jerry Moyes and his bankruptcy filing that involves his attempt to sell the team to a Canadian billionaire who wants to move the club to Southern Ontario.

Jim Balsillie, the Co-CEO of RIM, the company that makes Blackberry, has offered $212.5-million to buy the Coyotes on the condition he's allowed to move them to Hamilton.

Hamilton sits in what the NHL considers marketing territory for both the Sabres and Toronto Maple Leafs.

NHL Commissioner Gary Bettman says Moyes and Balsillie violated NHL rules by creating a scenario by which Moyes filed for bankruptcy, and Balsillie immediately filed his offer without consulting the league. The NHL maintains it has been in control of the team since it started loaning the Coyotes money in the fall - and as a result, the bankruptcy filing and proposed sale should be void.

A U.S. bankruptcy judge has set another hearing date for May 19 when arguments will continue over who controls the team.

2-On-Your-Side has obtained the documents the Coyotes filed in the initial bankruptcy proceeding. Within the motion, the Coyotes (debtors) claim the NHL blocking the sale would violate antitrust laws.

"Allowing the relocation of the Phoenix Coyotes and adding a third team to this geographic region would increase competition for, among other things, broadcast rights, media contracts, team merchandise, and fan support, all of which would lower prices for such goods and services and directly and indirectly benefit consumers. Higher prices and lower output - the direct result of what is likely to be sought by the NHL - are the hallmarks of anticocmpetitive behavior... The only reason for denying such request would be to protect the Toronto and Buffalo hockey teams... application of the NHL's by-laws in a manner that blocks or otherwise restricts the proposed buyer's attempts to relocate the Phoenix Coyotes would violate antitrust laws."

On Wednesday, NHL Commissioner Gary Bettman said he was skeptical of the Coyotes bankruptcy filing, and questioned whether league owners would approve the move.

TSN and the Arizona Republic have both reported the NHL was ready to present and offer to buy the team from Chicago White Sox and Bulls Owner Jerry Reinsdorf prior to Moyes filing for bankruptcy.

NHL Deputy Commissioner Bill Daly said Thursday that he's confident a new owner would emerge and that the team will play next season in Arizona.

The case seems headed toward a battle over the answer to a central question:

Can a Judge rule in favor of the sale and enforce a move to Ontario despite opposition from the National Hockey League?

2-On-Your-Side's Adam Benigni spoke to Garry Graber, a bankruptcy attorney with Hodgson Russ in Buffalo. He says it's possible a judge could force the move if the court rules the NHL is in fact violating antitrust laws by blocking the move.