Phoenix Coyotes bankruptcy The Phoenix Coyotes , a professional ice hockey team of the National Hockey League ( NHL ) , filed for bankruptcy in 2009 after incurring several hundred million dollars of losses since their move to Phoenix , Arizona . In December 2008 , the media became aware that the Phoenix Coyotes were losing money at a high rate and were being funded by the NHL directly . The media reports were minimized by the NHL president Gary Bettman and vice - president Bill Daly , but secretly the NHL had taken over operations of the Coyotes . In May 2009 , the owner of the team Jerry Moyes put the team into bankruptcy hours before receiving Bettman who was to present a potential offer to purchase . Moyes intended to sell the team to Canadian billionaire Jim Balsillie who intended to purchase the team out of bankruptcy and move it to Hamilton , Ontario without being restricted by the NHL ' s rules on relocation . From May until September 2009 , hearings were held in Phoenix bankruptcy court to determine the fate of the Coyotes and the holding company . Two potential bidders for the team surfaced , Chicago White Sox owner Jerry Reinsdorf and Ice Edge Holdings , Inc . but they did not put in a bid for the team at the bankruptcy hearing . Instead , the NHL put in the only rival bid to Balsillie for the team , while they fought Moyes ' plan to sell the team and move it to Hamilton against the NHL rules . Ultimately , the Phoenix court ruled that the team could not be sold to Balsillie , as the judge held that bankruptcy could not be used to subvert the league ' s rules . The NHL ' s bid was also insufficient for the bankruptcy judge , but Moyes and the NHL settled with the NHL buying the team and assuming all debts . The NHL negotiated a temporary lease with Jobing . com Arena owner , the City of Glendale , Arizona . The NHL then proceeded to work with the two potential bidders of Reinsdorf and Ice Edge to work out a deal with Glendale . Ice Edge signed a letter of intent to buy the team from the NHL , while Reinsdorf had won the approval of the City of Glendale . As of June 2010 , negotiations were not completed between the City of Glendale and Reinsdorf , and Reinsdorf has dropped out of the bidding . Glendale is once again negotiating with Ice Edge . The NHL , which had threatened to move the team to Winnipeg for the 2010 – 11 season , has agreed to keep the team in Glendale for the season , after Glendale agreed to fund its losses . Warning signs . On December 8 , 2009 , during a press conference at the annual December NHL board of governors ' meeting , the issue of the state of the economy was raised by reporters . The Phoenix Coyotes were reported to lose up to $ 35 million on the 2008 – 09 season . Asked to comment on Phoenix ' s loss , Commissioner Gary Bettman was quoted as saying " They ' re going to get through the season just fine . " The Coyotes ' s COO , Doug Moss admitted that the team had lost a lot of money and was still losing money . He was not prepared to reveal the number of season - ticket subscribers that the team had : " We have never really revealed our season - ticket base . . . it ' s too low , that ' s a number that ' s too low . " It was revealed during bankruptcy proceedings that the Coyotes averaged 5 , 450 season tickets per season for the four seasons from 2005 – 2009 . The true state of the Phoenix franchise was not revealed , however . In the documents filed with the Phoenix bankruptcy court , the NHL stated that the league took official control of the team on November 14 , 2008 . The league then began advancing money to the club from league revenues , and made a loan to the club in February 2009 , for a combined estimated total of $ 44 . 5 million over the full season . The league fired the Coyotes CEO Jeff Shumway and laid off 18 Coyotes employees . Moyes ' documents filed with the court indicated that the team had lost $ 73 million over the last three years , and that the projected loss was $ 45 million for 2008 – 09 . In the September 2009 bankruptcy hearings it was noted that an audit had shown that the team had never made a profit since moving from Winnipeg , and lost $ 54 . 8 million in 2008 alone . On December 23 , 2008 , the Toronto Globe and Mail reported that the Coyotes were receiving financial assistance from the league in the form of advances on league revenues . The Coyotes pledged all of their assets to New York company SOF Investments LP to cover an estimated debt of $ 80 million . The team had lost an estimated $ 200 million since 2001 and in recent years posted heavy losses , including $ 41 . 6 million in 2006 - 07 , $ 37 . 3 million during the 2007 - 08 season , and $ 54 million in 2008 - 09 . One of the team ' s owners , Jerry Moyes ' principal source of revenue , Swift Transportation was also in financial difficulty . ESPN reported that the league has become involved with the operations of the Coyotes and their revenues . The NHL apparently wanted to work with the city of Glendale which owns the arena and receives revenues from the team . ESPN also reported that Moyes was interested in selling his share of the team . Hollywood producer , and noted hockey fan , Jerry Bruckheimer was cited as a possible investor . Bankruptcy filing . On May 5 , 2009 , the Coyotes ' holding company , Dewey Ranch Hockey LLC , filed for Chapter 11 bankruptcy . In a statement , Moyes announced that he had agreed in principle to sell the team to PSE Sports and Entertainment , headed by Research in Motion co - CEO Jim Balsillie , for $ 212 . 5 million . As part of the deal , Balsillie intended to move the Coyotes to Hamilton , Ontario . Although initial reports said that Balsillie was considering Kitchener as well , Hamilton already had an NHL - sized arena in place , Copps Coliseum and Balsillie was already in talks with city officials to secure a lease for the arena . Balsillie had previously made unsuccessful approaches to purchase the Pittsburgh Penguins and Nashville Predators , with the intent of relocating either team to Hamilton . Anyone who wanted to make a counteroffer had to exceed Balsillie ' s bid by at least $ 5 million . At Moyes ' request , Balsillie agreed to post debtor - in - possession ( DIP ) financing of $ 17 million . Balsillie ' s efforts also started public relations efforts , including setting up the web site " makeitseven . ca " to build public support in Canada for his purchase and transfer of the Coyotes to Hamilton . The announcement came as a surprise to the NHL and even to Coyotes staffers . NHL Commissioner Gary Bettman had helped broker a deal that would have seen the Coyotes sold to Chicago Bulls and White Sox owner Jerry Reinsdorf . At the time of the announcement , Bettman was in Phoenix to present the deal to Moyes . Unlike Balsillie ' s offer , the Reinsdorf deal was to ensure the Coyotes stay in Arizona . Terms of the Reinsdorf deal were not disclosed , but The Sports Network ' s Bob McKenzie speculated that it was almost certainly less than the Balsillie offer . The NHL responded by stripping Moyes of virtually all of his ownership authority ( although he remained the owner in title ) . Bettman said that Moyes may not have had the authority to file the bankruptcy petition , and may not have even been in full control of the team by virtue of the massive financial assistance he ' d received . Although it has been widely speculated that southern Ontario is big enough to support a third NHL team alongside the Toronto Maple Leafs and Ottawa Senators ( despite the Buffalo Sabres and Detroit Red Wings being right on the doorstep of the region as well ) , Bettman suggested that it was not likely the league would approve any plan to move the Coyotes to Canada , and accused Moyes and Balsillie of attempting to " circumvent " league rules . He also reiterated that the NHL was committed to the Phoenix area . Bankruptcy hearings . The first bankruptcy hearing was scheduled for May 7 , 2009 . Court documents submitted by Moyes cite thirty creditors , including Moyes himself for an amount in excess of US $ 103 million . TSN ' s Bob McKenzie said that Moyes was very receptive to Balsillie ' s offer because , as the team ' s largest unsecured creditor , the best chance of getting most of his money back was to persuade someone to buy the team out of bankruptcy . The league ' s position was that it was Moyes ' fault that he paid himself so much money and that he was entitled to only $ 14 million of $ 103 million loss , which would have been the case if Jerry Reinsdorf ' s lower bid was accepted . At the bankruptcy hearing , the NHL argued that it had been in control of the team since November by virtue of a proxy agreement with Moyes . The NHL claimed this agreement , and several others signed by Moyes , specifically barred Moyes from filing for bankruptcy . Moyes claimed that the agreement only gave the league voting rights , not outright control . Bankruptcy court judge Redfield Baum scheduled a second hearing for May 19 to determine who actually controls the team . However , deputy commissioner Bill Daly said that regardless of how the judge ruled , the league owners would have the final say in whether to allow the Coyotes to move . Daly repeated Bettman ' s doubts about Balsillie ' s bid , saying Balsillie was acting " in total disregard " for NHL rules . At the May 19 hearing , Baum ordered the NHL and Moyes to settle the ownership question through mediation , while expressing skepticism for the NHL ' s argument that the proxy agreements gave it control of the team . He said that he needed to decide whether to allow the move to Hamilton before the franchise was sold . However , the NHL claimed there was no way it could reach a decision on whether to allow the move in time for the 2009 - 10 season . The day after the hearing , Balsillie spokesman Rich Rodier told " Arizona Republic " Coyotes beat writer Jim Gintonio that Balsillie was willing to keep the team in Phoenix for the 2009 - 10 season , provided that the NHL fund any losses . Although the judge ordered mediation , none took place . In late May , Balsillie filed a formal application with the NHL to purchase the Coyotes and relocate them to Hamilton . Baum set up a tentative hearing to consider an auction of the team if the NHL Board of Governors rejected Balsillie ' s bid . The other three major North American sports organizations filed " amicus curiae " briefs with the court supporting the NHL position . They argued that if Baum forced the league to move the Coyotes , it would " disrupt the business " of professional sports . New York ' s two Senators , Chuck Schumer and Kirsten Gillibrand , also wrote Baum to oppose the move on the grounds that a Hamilton - based team would do severe economic harm to the Sabres . Although Hamilton is usually reckoned as part of the Toronto market , it also falls within the Sabres ' protected market , as it is only 45 miles from Buffalo . The NHL filed documents stating that four prospective buyers had filed applications with the league . All four intended to keep the Coyotes in Phoenix . These included Jerry Reinsdorf , Toronto Argonauts co - owners Howard Sokolowski and David Cynamon ; and John Breslow of Las Vegas , who was already an owner of 3 % of the Coyotes . A fourth remained anonymous . The league stated that any franchise moved without the league ' s permission , such as moving it to Hamilton would render it valueless . " At most , the proposed transaction would transfer a collection of used hockey equipment — none of which could bear the NHL logo . " At a June 9 , 2009 hearing , Judge Baum agreed with the NHL that the league is within its rights to demand a relocation fee . Balsillie lawyer Richard Rodier suggested that the league would set the fee as high as $ 100 million to dissuade Balsillie . Balsillie himself was quoted as saying that he was open to paying the fee , although his lawyers suggested that he would walk away from the deal if the fee is ' exorbitant . ' On June 15 , Baum ruled against Balsillie ' s proposal , stating that the timeline imposed by Balsillie was unrealistic and did not provide enough time for the courts or the NHL to wade through the issues posed by the relocation . Baum also rejected the proposal in part due to the fact that Balsillie ' s offer did not include any relocation fee to the NHL , to which they would be entitled since southern Ontario is potentially a more lucrative market than Phoenix . In the ruling , the judge also dismissed claims made by Moyes and Balsillie ' s lawyers that the NHL was violating antitrust laws in not allowing the move . The ruling effectively ended any chance of the Coyotes moving for the 2009 - 10 season . Baum ' s ruling did not rule out Balsillie as an NHL franchise owner . Balsillie indicated at the time that he would continue bidding on the team in spite of the failure of his first offer . The NHL indicated a desire to hold an auction in September to find a new owner for the team , indicating that the auction would be open to prospective owners who would keep the team in Arizona , and stated that at least four potential buyers had been identified . The league had also indicated a willingness to hold a second auction , open to relocation , if the team could not be sold in the planned September auction . On July 9 , the Court set two auction dates for the team . The first auction on August 20 , would be a primary auction with the stipulation that whoever has the winning bid , must agree to keep the team in Phoenix for at least 5 years , after which they may relocate with league approval at any time . An undisclosed minimum bid must be met in this auction . Should this auction fail , the second auction on September 10 , will be run with no minimum bid ; in which the new owner will have the right and authority to move the team to another location at any time without league approval after the 2009 - 10 season . Balsillie stated that he was willing to keep the team in Phoenix for the time being and intended to bid in the August auction . On July 29 , the NHL Board of Governors met to consider the application of Balsillie to purchase the Coyotes and the relocation . The Governors voted overwhelmingly 29 – 1 against Balsillie ( unanimously except for Moyes ' representative ) . The Governors also voted to approve Reinsdorf as a potential owner . Daly stated that Balsillie was rejected under bylaw 35 of the NHL Constitution , which allows applications to be rejected to persons which the NHL believes are not of " good character and integrity . " Balsillie responded in a filing saying that " the NHL has long tolerated indicted and even convicted criminals among its ranks " , noting that moral grounds and questions of character have never been used " in the entire history of the NHL to reject any applicant . " The NHL also revealed another bid , by businessman Anthony Leblanc of Thunder Bay , Ontario to purchase the Coyotes , which they also rejected as ' incomplete ' but encouraged Leblanc to pursue the bid . Leblanc ' s company , " Ice Edge Holdings Inc . " publicly revealed their bid with a letter of intent filed with the bankruptcy court . The club would bid up to $ 150 million for the team , and keep it in Phoenix , with up to five games played annually in Saskatoon , Saskatchewan . Ice Edge also named Canadian businessman Daryl Jones as one of the principals in its group . On August 13 , 2009 , Judge Baum ordered the NHL to hand over documents regarding the Coyotes ' relocation . These documents were related to any potential expansion to Hamilton , and any relocation fees charged for any franchise moves by the NHL . Documents filed with the court included the previously secret NHL Constitution and also the section of the NHL Bylaws which spelled rules of relocation fees . Balsillie ' s lawyers filed the documents , claiming that sections of the Constitution violate anti - trust law and asked that the judge ignore the rules of the NHL on that basis . These became part of the public record and available on various web sites to download . On September 6 , 2009 , it was reported by the Toronto Star that the NHL set a potential relocation fee of $ 101 million to $ 195 million to move the Phoenix Coyotes to Hamilton , while economics professor Andrew Zimbalist in a study conducted for James Balsillie valued the move at $ 11 . 2 million to $ 12 . 9 million . On September 7 , 2009 , Balsillie had reportedly sweetened his offer by US $ 40 – 50 million to buy out the lease of the Glendale Arena . On September 9 , 2009 , it was reported that both Reinsdorf and " Ice Edge Holdings " had withdrawn from the bidding for the Coyotes , leaving only Balsillie and the NHL as prospective purchasers . It was announced on September 24 that Wayne Gretzky had stepped down as head coach . On September 30 , 2009 , Judge Baum rejected both bids . This effectively ended any chance of a forced sale to Balsillie and relocating the Coyotes to Canada . However , the NHL ' s bid was criticized for its failure to repay Moyes and Gretzky , two of the largest creditors , though the league had a chance to improve its bid . While Balsillie ' s bid treated both as full creditors , the NHL promised Moyes only about $ 14 million of his claimed losses of $ 104 million , which would be shared with Gretzky who has a claim of about $ 22 million . Sale to the NHL and aftermath . On October 26 , 2009 , Jerry Moyes reached a deal to sell the Coyotes to the NHL for $ 140 million . " It remains the NHL ’ s intention upon taking control of the club , to stabilize the club ’ s operations and , as quickly as possible , to resell the club to a new owner who is committed to operating the club in the Glendale / Phoenix market , " said Bill Daly . The sale was finalized on November 3 , 2009 . The price included $ 36 . 3 million already owed to the NHL , $ 80 . 7 million in secured claims and $ 11 . 3 cash going to the seller . $ 2 million went for professional fees and the NHL paid $ 11 . 6 million in unsecured claims , although not those of Moyes ' family . The agreement also lowered a $ 30 million guaranty by Moyes to $ 15 million . If the team is resold within two years , the bankrupt estate will receive the net profit . The NHL agreed to pay the modified arena lease until June . Since securing ownership of the team the league openly stated that it was in negotiations with Ice Edge Holdings , Leblanc ' s partnership of Canadian and Phoenix - area businessmen , but was rumoured to have resumed negotiations with Reinsdorf also . The Ice Edge bid , while planning to keep the team in Phoenix , also proposed to play five Coyotes home games in Saskatoon each season as part of a five - year plan to return the Coyotes to profitability . A new prospective purchaser for the team appeared in late November 2009 . Steve Stotland , a Montreal businessman , was reported to be teaming with undisclosed local investors to prepare a bid to buy the team . Stotland had previously been involved with the Washington Capitals and was interested in purchasing the Montreal Canadiens in 2000 . Stotland attended the November 12 game between the Coyotes and Canadiens and met with team management . In December 2009 , the NHL announced that Ice Edge Holdings had signed a letter of intent with the NHL to purchase the Coyotes . Ice Edge would still have to negotiate a lease agreement with the City of Glendale , and get its ownership approved by the NHL Board of Governors . In March 2010 , it was reported that the league has negotiated an agreement in principle in place to sell the team to Canadian billionaire David Thomson , a major investor in True North Sports and Entertainment ( TNSE ) , in the event negotiations to keep the team in Arizona fail . TNSE owns and operates the 15 , 000 - seat MTS Centre in Winnipeg and according to the report intends to begin play there from the 2010 / 11 season . With a seating capacity of 15 , 015 for hockey , MTS Centre would be the smallest building in the NHL and it would presumably have to have long - term plans to increase the capacity by at least 2 , 000 . However , although representatives for both the NHL and TNSE confirmed past discussions regarding a possible return of an NHL franchise to Winnipeg , both the NHL and TNSE denied any agreement was in place . By March 2010 , the NHL had not finished the sale to Ice Edge . It was reported that Ice Edge had run into trouble securing sufficient financing although the group denied the claims . The NHL launched a lawsuit for $ 61 million against former Coyotes owner Jerry Moyes to recover $ 10 million in bankruptcy court costs , $ 20 million in losses for 2009 - 10 and $ 11 . 6 million owed to creditors . . On May 10 , 2010 , the lawsuit was transferred from New York to Arizona . Moyes is planning to move for dismissal of the case . On April 9 , 2010 , the City of Glendale announced that it had received two offers to purchase the Coyotes , with Memorandums of Understanding from both Ice Edge Holdings and Glendale Hockey ( headed by Chicago Bulls and Chicago White Sox owner Jerry Reinsdorf ) . The MOU ' s would both keep the team based in Glendale ' s Jobing . com Arena . . Both groups would change the name of the team from Phoenix Coyotes to Arizona or Glendale Coyotes . Reinsdorf ' s memorandum proposed a " community facilities district " that would sell bonds and collect revenue . The city would pay the NHL up to US $ 65 million in three - year increments - - $ 21 . 6 million the first year , $ 21 . 6 million the second year and $ 21 . 8 million the third year . This was immediately objected to by the conservative " Goldwater Institute " of Arizona , stating that it placed undue risk on the City of Glendale and Reinsdorf took none of the risk . Ice Edge ' s proposal , which required annual fees of $ 5 million in parking revenues , was more acceptable to the Institute . On April 13 , 2010 , the City of Glendale , at a weekly council meeting , approved Reinsdorf ' s proposal by a vote of 6 - 0 while rejecting Ice Edge Holdings ' proposal 5 – 1 . The agreement included a special tax district surrounding the arena , expected to generate $ 47 million annually from businesses in support of the team . The agreement allowed Reinsdorf the option to move the team after five years if revenues are not up to expectations . John Kaites , an attorney for Reinsdorf and a partner in the Glendale Hockey , LLC group has claimed the out - clause to be an " assessment period " . Former Coyotes CEO Jeff Shumway criticized the deal , saying that the team would not have gone bankrupt if the same deal had been available two years earlier . Reinsdorf ' s bid , which will pay the NHL $ 65 million for the team , has to be approved by the league board of governors . After the vote , Bettman was quoted as characterizing the Glendale vote as a " terrific step " and that he anticipated that the league would have no problems in approving Reinsdorf ' s purchase , including the 5 - year ' out clause ' . Bettman declined to give a timetable for the purchase approval . On May 7 , 2010 , the " Globe and Mail " reported that negotiations to finalize the details of the MOU between Reinsdorf and Glendale were going poorly and Glendale had sought out Ice Edge to return to negotiations . What is reported to be in dispute are the terms of the special tax district . The " Arizona Republic " reported that negotiations had resumed with Ice Edge , with Glendale removing its objection to guaranteeing $ 5 million in revenues from parking for the team . Scott Burnside of " ESPN " characterized the Reinsdorf deal as " dead " , and that Glendale must agree to some conditions of the NHL ' s such as guaranteeing operating losses before any sale to " Ice Edge . " On May 10 , it was reported that negotiations between Glendale and Ice Edge had broken down . Glendale , which plans to cut its 2010 - 11 budget by $ 14 . 7 million through cost - cutting , faced a NHL - imposed deadline during the negotiations . The NHL could sell the team and move it if a deal is not done by July 1 , 2010 . At a May 11 , 2010 meeting , Glendale City Council voted to extend the sales period by agreeing to fund the team ' s losses for the 2010 – 11 season ( up to a maximum of $ 25 million ) if the team is not sold by July 1 . The NHL , which had drawn up a schedule with the team playing in Winnipeg , as a back - up plan , required the condition to continue the team in Phoenix . NHL Deputy Commissioner Bill Daly appeared at the Council meeting , stating that the sale of the Coyotes is still expected to close by the end of June and the payments may never be needed . Glendale city manager Ed Beasley stated that both Reinsdorf and the Ice Edge group were still in the running to purchase the team . The decision also gave Beasley the authority to set up a ' Community Facilities District ' around the arena . The District would collect fees , possibly including ticket surcharges and parking charges , that would be directed to the hockey club . On June 4 , 2010 , Glendale announced that it had a new Memorandum of Understanding with Ice Edge . The new MOU had a new clause whereby Ice Edge can exit its agreement with Glendale . To retain negotiating rights with Glendale , Ice Edge was given ten days to provide legal assurances from its bankers showing it can borrow the money it needs and the $ 25 million fund for the NHL . Reinsdorf responded to the announcement by announcing that he was withdrawing from the bidding , saying " it was time to move on . "