A lead attorney for the Phoenix Coyotes says NHL commissioner Gary Bettman told him he would rather return the franchise to Winnipeg than move to southern Ontario.
Earl Scudder related the comment in a declaration filed in U.S. Bankruptcy Court, where a showdown over control of the franchise between the National Hockey League and owner Jerry Moyes is set for a hearing on Tuesday.
In court documents, NHL deputy commissioner Bill Daly called the bankruptcy filing "nothing more than a scheme to misuse this court and sidestep the NHL's transfer of ownership and relocation process, as well as the league's fundamental right to choose its own members and to decide where they should be located."
The bankruptcy plan before judge Redfield Baum would sell the team to Canadian Blackberry magnate Jim Balsillie for $212.5 million on the condition the franchise be moved to Hamilton in southern Ontario.
The NHL, which wants to keep the team in Glendale, contends that since it had assumed control of the franchise, the bankruptcy filing was unauthorized and should be thrown out.
Bettman has said he doubts the league's owners would approve the sale to Balsillie, who failed in earlier attempts to purchase the Pittsburgh Penguins and Nashville Predators.
Moyes' attorneys have filed documents saying blocking the move to Canada would violate U.S. and Canadian antitrust law. The league says its authority already has been upheld by courts in both countries.
Winnipeg was only mentioned in passing and there is no other evidence the NHL is considering such a move.
Scudder, who was helping Moyes try to find a buyer, goes on to relate that in the April 3 conversation Bettman said he wanted to team to stay in Glendale because of the franchise's 25-year lease there.
"He stated the matter of relocation was an NHL matter that was beyond the authority of any franchise owner," Scudder said.
According to Scudder's account, the only way a team could end up in southern Ontario, Bettman said, was through expansion.
A flood of court documents filed during the week centers on agreements signed by Moyes when he bought the team in 2006 and, most significantly, when the NHL took over funding of the franchise last November.
The league contends those agreements show the NHL had assumed control of the franchise and that Moyes had no authority to file for Chapter 11 bankruptcy and sell the team.
The Nov. 8 document states Moyes, "appoints, with immediate effect, the commissioner of the NHL as its true and lawful attorney and proxy of respect to all the undersigned's interests and rights in the club."
The document goes on to specifically say the NHL had taken over authority for any bankruptcy proceedings or negotiations to sell the club.
"I understand that Moyes was fully aware that he was giving up and ceding to the commissioner control of the equity and operations," Daly said in his declaration.
Jeff Shumway left as Coyotes CEO in January — he says he resigned, the league says he was fired. He said in documents he was told at the time of the November signing by the league's general counsel David Zimmerman that the NHL was not trying to expand its authority over the team and "did not amount to any exercise of proxy rights by the NHL."
Moyes and Shumway filed declarations late Friday contending the NHL has never had control of the team.
"The NHL did not manage, control, or direct Coyotes hockey, the Phoenix Coyotes hockey team or any of their related operations, nor to my knowledge did it attempt to do so," Moyes said.
The NHL contends Moyes and Balsillie carried on "secret negotiations" while the league was pursuing a plan to sell the team to a group headed by Jerry Reinsdorf, owner of baseball's Chicago White Sox and the NBA's Chicago Bulls.
Daly said he flew to Phoenix on May 5 to present a letter-of-intent to Moyes from Reinsdorf.
"Just prior to the meeting, Scudder called to inform us the club had filed for bankruptcy and had entered into an asset purchase agreement with Jim Balsillie which was expressly contingent on the team's relocation to southern Ontario," Daly said in his declaration.
The amount of Reinsdorf's offer is not known, but it would include modifications of the team's lease agreement with Glendale.
Scudder, meanwhile, said Balsillie was "the only potential purchaser or investor that had suggested an offer in the range that would return money to creditors and even a portion of Mr. Moyes' more than $300 million investment in the team."
According to the documents, the Coyotes lost nearly $74 million in 2007 and 2008. Moyes has said that even with the Balsillie agreement, he would lose about $200 million.