The majority owner of the Phoenix Coyotes is being sued by a trust set up for his children for failing to repay $110 million he borrowed but never paid back. A lawsuit filed in Maricopa County Superior Court said Jerry Moyes already had obtained more than $33 million from the Moyes Children Limited Partnership in January 2002 when he signed a promissory note.
That note not only cemented in the terms for the cash he already had but entitled him to borrow up to $110 million with interest equal to the prime rate.
He did hit the limit, the lawsuit says.
All funds were due in January 2005. And, according to the legal papers, nothing has been paid.
But the dispute appears not to be that simple.
In a separate legal action, the six children of Jerry and Vickie Moyes are charging that Ronald Moyes, the general partner of the trust run for them, has breached his duties. They want the trust dissolved and the assets divided — at least in part because they say Ronald is using his position to squeeze their father.
That lawsuit calls Ronald Moyes Jerry’s “estranged brother.’’
Jerry Moyes told Capitol Media Services he understood the lawsuit by the trust against him is going to be dismissed. But Moyes would not discuss where the money went.
The attorney for the trust did not return phone calls.
Moyes, the former chief executive officer of Phoenix-based Swift Transportation, has been the financial muscle behind the Coyotes for years.
Moyes, Steve Ellman and Wayne Gretzky bought the team in 2001 for a reported $127 million.
In 2002, Moyes became the majority owner when he paid off $60 million in loans and invested another $20 million that allowed Ellman to purchase the team for about $125 million.
Earlier this year, he split his partnership with Ellman and took control of the team, assuming $65 million in debt. Overall, estimates are he has invested about $240 million in the team.
Moyes then appointed Jeff Shumway, who has been Moyes’ personal attorney, as the team’s CEO.
Ellman owns 25 percent and is in charge of the Westgate retail project.
The second lawsuit, filed Aug. 31 by the six children, said trusts were set up for them, the first in 1985 by their grandmother and, two years later, by their parents.
When formed, the trust assets consisted of varying amounts of stock in Swift, which at the time was privately held. The company went public in 1990 and, according to the lawsuit, the value has “substantially increased.’’
Ronald Moyes was named the trustee.
The trusts were set up so that when a beneficiary reached 25 he or she would get one third of his or her share. At age 30 each would get half of the remaining estate, with the balance at 35.
The children now are between 21 and 36.
According to the lawsuit, Ronald Moyes created the Moyes Children Limited Partnership in 2000, naming himself as general partner, with the two trusts as limited partners. Moyes could do this as the trustee of the other trusts.
The legal papers contend that Ronald Moyes is using his position to leverage a favorable settlement, including a “lucrative cash payment’’ of a lawsuit filed two years ago in Texas against his brother.
According to the Waco Tribune-Herald, Ronald Moyes charged that executives of Waco-based Central Trucking operated the company in a manner “designed to enhance their own or Jerry Moyes’ wealth’’ to the detriment of the company and its shareholders. Jerry Moyes already was Central’s largest shareholder when Swift purchased the company in 2005.
The new Arizona lawsuit by the children wants the trust proceeds distributed. In the alternative, they want Ronald Moyes removed as general partner, saying he did not make a cash or property contribution as required.
Efforts to reach Ronald Moyes were unsuccessful.
In 2005, Moyes agreed to pay $1.26 million to settle a stock-trading inquiry by the federal Securities and Exchange Commission. He did not admit any guilt.
He subsequently stepped down as the company CEO.