For the bullet summary, please go here.
It’s time to recap this story in plain english. It’s important to just lay it out there. To put the opinion based on the obvious to paper.
It’s easy to get so wrapped up in the daily drama, and legal maneuverings occuring in court, to lose focus on the obvious; get clouded on what sits right in front of us.
In Hamilton, and all of Canada, when we first heard of Jim Balsillie getting another crack at an NHL hockey team, it came as a bit of a surprise. ‘ Who now? The Phoenix Coyotes? Why?’
The ‘why’ is really the interesting part. The ‘why’ is also the justification. And, the ‘why’ has led to a lot of people scrambling to cover their tracks, to want to retain evidence, and to strategize how to ‘explain’ their actions.
But, like all financial transactions, documents were produced, leases drawn up, emails sent, phone calles were made and ignored, and a meddly of other things that lead us to where we are in this story.
I say story, but make no mistake, there is a dark reality to this real life case that leaves a sick feeling in the pit of one’s stomach.
We are talking about a man named Jerry Moyes. Now Mr. Moyes started out in the trucking industry, worked hard, and built it from the ground up to be a very large firm. He knew what it took to run a succesful business. Sometimes though, despite best effort, the economy can go sour, and a business can lose cash flow, profits, and end up in hard times. This is what happened to Jerry Moyes in the trucking industry, as did happen to many others.
But, at the same time, Jerry Moyes was looking to save his hockey franchise from financial decay, and he took his own wealth, and the wealth of his familty and injected it into the Coyotes. The last of which was in the form of a loan to the Coyotes. This has become a sticking point in the current bankruptcy procedings.
The NHL would want us to believe that the money Jerry Moyes put in the team was an owner putting in equity. A share position, and not a creditor position. This, in strategy, would give the NHL an ‘out’, and be able to find a bidder (or bidders) that would, in essence, be able to take this team over with ‘no money down’. You see, Jerry Moyes $104 million creditor position cramps the NHL’s plans.
But it is interesting that the offer from Jerry Reinsdorf is a ‘no cash’ offer. It just enlightens us more to the lack of confidence in the team’s viability. It also suggest where collusion is fairly obvious.
It’s important to recap the expectations of the Reinsdorf offer. According to John Kaites, the lawyer for the Reinsdorf coalition, the City was negotiating and talking to the group for six months leading into the offer. There was courting all right. But for much longer than would appear normal. No, this situation was in the works for a while, and explains the presumptous terms of the bid. It might have been a ‘done deal’ before it was ever made public.
There are secured creditors, the largest being SOF Investments owned by Michael Dell. This is worth $80 million. Most significant of this loan is the strangehold terms that were drawn up. Mr. Moyes would get a measly $9 per ticket sale to go towards the Coyotes, and Dell, would take all other revenues as ‘collateral’ against the loan. The bottom line. Moyes did not have a chance based on the easy math to pay the bills. Why would the terms be that bad? Good question. Let’s carry on.
The City of Glendale was asked on several ocassions by Mr. Moyes to rework the Jobing.com lease terms. They refused. Mr. Moyes was yet again wondering why no consideration, as his team was suffering more and more.
Finally, the NHL had to step in with assistance to ‘help’ Moyes with a loan. But, in order to get the loan, he had to sign various proxies surrendering all rights to control of the team in the process.
Now, over the articles written, we have shown that Jerry Reinsdorf coming into the scene was anything but a coincidence. In fact, all the facts leading up to the Coyotes going bankrupt was a cold, calculated plan by the friends to Glendale.
Jerry Reinsdorf’s son Michael has a very good relationship with the City of Glendale. He also is responsible for stadium and arena development and financing negotiations for the City. He was responsible for overseeing the building of Jobing.com arena, and we still do not have any proof of involvement in lease negotiation assistance, that he professes to be an expert in. If Jerry Moyes needed help, where was the City of Glendale and Michael Reinsdorf to lend professional assistance? Another red flag.
To make the summary short, based on the knowledge obtained, it would appear there is a strategy of business alliances in Glendale that are responsible as corporate partners to increase the development of land, with the hope of influx of residents, taxes and jobs. There has not been terrific proof that this growth has occured. The only for sure, is the corporate partners like Michael Dell and Michael Reinsdorf, that are proffiting from their strong ties to the City.
Glendale, it would seem has ‘hopped into bed’ with these private corporations so much, that they colluded to get rid of Jerry Moyes, because he did not offer continued growth. The means to the end was the financial strangelhold with the SOF loan, and the ignoring of his need to have the arena lease reworked.
With the addition of the second bid by Daryl Jones, it would, with more careful look, appear to be another good boy maneuver, bringing in ‘friends of friends’, with common business interest. Hardly an autonomous bid.
In the Board of Governors of the NHL, the interesting choice of words that Jerry Reinsdorf is fully endorsed, while the rookies show promise, but are still not fully approved is interesting too. Going back to plan A, where plan B may have just been an attempt to show the court that the NHL did not collude with Reinsdorf. I don’t know if anyone will buy that, including the U.S. bankruptcy trustee who smelled the rat a while ago.
And the big proof is the Reinsdorf offer. How obvious can it be? It requires a friend, Michael Dell, to renegotiate his SOF loan. Golly gee. And it requires the NHL to rework or dismiss it’s loan. You don’t say? And, are you ready for it? It requires the City of Glendale to work a plan of concessions that Moyes was asking for, but was ignored. And, I hope you are sitting down. The City of Glendale negotiated with Jerry Reinsdorf when they wouldn’t with Jerry Moyes. Wow, good to have a son in tight with a municipality, eh?
I hope Moyes has a good legal team to go after the boys civilly when this round is over.
If it could be anymore obvious by the demands that the strangelhold the ‘friends’ had on Jerry Moyes, I don’t know how you could do it. The proof is in the offer. Don’t put Jerry Reinsdorf in the same position as Moyes. Are you kidding me?
With Michael Dell repositioning himself as a major player in land development with Related Companies, it would seem he has learned to hedge his opportunities. With computer industry profits diving, and the opportunity for easy, big money in land sales tax strategies with government, it would appear he has a lot to gain and lose. So much so, he would want to ensure he structures Glendale with as many friends as he can. Will he make the loan terms much better that $9 per ticket? Please, do you have to ask?
It can only be hoped that the judge sees this charade for the joke it is. A collusion poster child legal departments at ivy league universities could use for years to come. Wouldn’t it be ironic if these same friends went to these universities for advice? Downright hilarious!
No, Judge Baum has a chance, along with the U.S. trustee in bankruptcy, to put these ‘friends’ on the ropes, then to the canvas, and put them in a stranglehold of their own.
Why did Hamilton learn of yet another team in financial ruin ready to make a deal? It was the courage of Jerry Moyes to call the NHL, and the friends of Glendale’s spade. Calling a spade a spade!
Is it any wonder Commissioner Bettman was scrambling to avoid the public knowledge that would occur when this charade went public? Is it any wonder he put together proxies in a feeble attempt to control a man that could not be controlled?
There are no coincidences here. Just a long stream of maneuvers, greed, lies, and deception. They never would have expected Jerry Moyes to blow the whistle. I for one, am proud of him. I support him, and I don’t even know him. But, I can relate to the injustice he experienced. And I will do my part, along with others like Jim Balsillie to help him regain his wealth.
Jerry Moyes deserves our support. The NHL, and the friends of Glendale deserve the exposure they get too.
May justice prevail!