Welcome back to the continuing story of life and conflict surrounding a NHL franchise the Phoenix Coyotes.

Since we last "met" there has been one hearing (Monday June 22) and the deadline to submit an application for interested owners for a local franchise was Friday June 26th. The Coyotes also held an open house Thursday 6/25 at Jobing.com arena.

Backtracking for a bit one legal pundit is encouraged by Baum's 6/15 ruling as it gives bankruptcy creditors more say than some of the recent mega-bankruptcies where the government stepped in and quashed their rights.

On Friday June 19 Balsillie and the "Make It Seven" PR campaign held a rally in Hamilton Ontario. A few thousand attended. Balsillie did not attend perhaps due to the business media criticism of him paying more attention to his purchase attempt than running Research in Motion; the day of the rally was the same day that Apple released its new iPhone a major rival to RIM's Blackberry. There were some demonstrators at the rally supporting the AHL Hamilton Bulldogs who may be ousted from the Copps Coliseum in favor of a NHL franchise. A Phoenix blogger wonders if the Canadian public and media are growing tired of the makeitseven.ca PR; perhaps not.

It was revealed that the Reinsdorf group had incorporated as Glendale Hockey LLC on June 1st and is the only potential group of the four who previously indicated an interest in local ownership that have gotten so prepared to make an official offer by 6/26. Current minority owner Breslow later pulls out of the bidding.

In preparation for the 6/22 hearing Balsillie's group and the NHL submitted their respective plans for a combined (relocation and non-relocation) auction and a two-step auction (first non-relocation and if needed a relocation auction).

Moyes and Balsillie want to revise the previously agreed upon schedule asking the judge to force the NHL to consider all relocation bids by July 20 offer a decision on Balsillie's ownership the transfer to Hamilton and the relocation fee by July 31 and all other bids including relocation by Aug. 24.

The Monday 6/22 hearing in bankruptcy court before Judge Redfield T Baum had at least one unique activity that being hearing from the Reinsdorf/Glendale Hockey LLC camp for the first time with a promise of submitting a local bid for the Phoenix Coyotes by Friday. One of the concerns was the short timeframe for bidders other than Reinsdorf to negotiate a new arena lease; the City of Glendale has endorsed the Reinsdorf effort.

As a result of the hearing the following non-relocation schedule was set:

July 24 – Bids filed with court

July 30 – NHL approval of ownership groups

July 31 – objections to the sale

Aug. 3 – Responses to objections

August 5 – auction

And the alternate relocation auction schedule was also set:

jections to sale including any NHL rejections of ownership groups or relocation applications. Sept. 4 -- Responses to objections. September 10 -- auction

The Reinsdorf team includes former Mighty Ducks of Anaheim CEO Tony Tavares. (Note that he is also involved in a group looking to purchase the NHL Florida Panthers. See Article 13 of the NHL constitution on cross-ownership at non-controlling owner levels.)

Local story on hearing.

The Toronto Star noted:

An offer that keeps the team in Glendale solves a lot of tricky issues saving the judge from ruling on the legality of the NHL's bylaws and the hockey team's lease with the city of Glendale. Also the judge noted the longer a team remains in bankruptcy the more debt it runs up which makes matters worse for all creditors.

And Canadian Press commented:

Baum had stern words for the NHL after its lawyers indicated it would be difficult to come up with a decision on Balsillie's bid to move the team by the Sept. 2 deadline the judge set.

The judge said the league's board of governors would "either have to reach a decision or have a very good explanation of why they've been unable to."

After the hearing Daly said Balsillie -- who failed in bids to buy the Pittsburgh Penguins and Nashville Predators -- hasn't endeared himself to NHL owners with his behaviour in the Coyotes case.

One of the issues that came up needs some negotiation between the NHL and NHLPA:

Additionally Baum suggested that the NHL and its players’ association get together “in good faith” to determine if the prospective buyer automatically assumes all the players’ contracts the team holds or whether it can select which contracts it will retain.

Balsillie has no plans to participate in the non-relocation auction.

NHL Deputy Commission Bill Daly comments after Monday's hearing.

Q: How soon can you rule on Balsillie’s applications?

A: That’s a good question. As we’ve said all along a relocation application properly looked at and reviewed is something that takes several months. It’s not something that takes several weeks. I think we’re going to focus in the first instance on a local sale process an auction process but it doesn’t mean we aren’t going to continue to process Mr. Balsillie’s applications . . . We’re going to update the Board of Governors on the status of the Phoenix situation at our Board meeting on Wednesday and I’ll have a better sense where the Board wants to go in terms of processing those applications.

Q: Would you be surprised to see them approve a relocation – especially to Mr. Balsillie after what the League’s been put through?

A: Two separate issues. I’m not going to presume what the Board might do because it’s totally within their power. But certainly I think the Board has legitimate questions as to his suitability as an owner.

On Wednesday 6/24 the NHL Board of Governors met prior to the NHL Entry Draft. One of their agenda items was to talk the Balsillie camp about their applications for ownership and relocation.

And from the Globe and Mail:

Breaking his long silence on the quest by Canadian businessman Jim Balsillie to buy the NHL team and move it to Hamilton Gretzky said that once the ownership situation is clarified he would be willing to sit down with the owners “and make it where everybody’s comfortable and happy. It’s as simple as that.” With some backlash.

Meanwhile Brian Burke also made some comments:

And the Maple Leafs president and general manager said yesterday that he believes the Coyotes should remain in the desert and be given an opportunity to succeed rather than moving to Hamilton or whatever locale NHL commissioner Gary Bettman may give his blessing.

"For every situation like Phoenix you have to look at Washington and Pittsburgh" [and Chicago Boston a few years ago]..."I hope we're looking back at Phoenix in a couple of years saying: 'Remember when they were in trouble?' I think we've got to find a way to keep that team there and let them develop. They've got some good young players."

One pundit provides some unsolicited advice to Reinsdorf namely suggesting renegotiating of the lease agreement find cheaper coach (or negotiate lower deal) and "hire a John McDonough clone and start a new marketing campaign."

Players are now hopeful they'll stay in Phoenix.

Thursday the Phoenix Coyotes hosted a rally at Jobing.com with player food and more. More than 3000 fans attended.

“It was a tremendous turnout by the fans” Coyotes President Doug Moss said. “They were an energetic crowd and really showed their support for the Phoenix Coyotes and Glendale. The players enjoyed it too and they received a lot of support from the fans.”

Asked to characterize the mood of the fans Moss said: “They were very positive very upbeat and very passionate about things. I think it was very cathartic for them. There was an electricity in the air. They can’t wait to come back here in September and watch some games.”

On Friday 6/26 the Reinsdorf/Glendale Hockey LLC submitted their application at the same time the Phoenix Coyotes were at the podium in Montreal taking their first round draft pick. (Local story Reuters; Canadian criticism) And the only one before the end of the day.

But there is a wrinkle that could scuttle the bankruptcy court sale to the Reinsdorf/Glendale Hockey LLC namely the Goldwater Institute a conservative tax-payer rights organization has sued the City of Glendale for not releasing in-progress documentation of their negotiations with the Reinsdorf/Glendale Hockey LLC over a new lease for the Jobing.com Arena.

The city issued a statement criticizing the lawsuit.

"The legal action filed today in Maricopa County Superior Court by the Goldwater Institute is without a factual or legal basis" the statement reads. "The city has and will continue to honor Arizona Public Records Law."

"Releasing documents at this time related to a matter in bankruptcy court and subject to complex business negotiations is not in the best interest of the public" Glendale added.

And

“The Goldwater Institute’s assertion that the city has said in numerous media reports that the city plans to offer tax payer subsidies to potential new owners of the Phoenix Coyotes is incorrect. The city has stated that appropriate and legal modification of the existing arena-use agreement may be necessary. Any modification must be approved by the City Council which will be done in open session and in accordance with law” the city statement said.So...So it will be fascinating to see if and where Baum draws the line. The NHL may well feel it's justified to continue campaigning to retain its powers to designate franchise ownership but bankruptcy is about creditor interests not league constitutions. The puck still belongs to Baum.But the offseason business goes on. With some concerns about other teams that may tender offer sheets to the Phoenix RFA players.Does the NHL tell the rest of the league to back off thereby skewing the free-agent market? Daly says there will be no interference from the league. Given the obvious conflict-of-interest and collusion implications that is the wise thing to do...."No disrespect to the players but I could get similar types of players as unrestricted free agents and not have to worry about paying compensation [in the form of draft picks to the Coyotes]" one GM said requesting anonymity to avoid tampering charges.Still the situation could have implications for the free-agent market serious enough that Paul Kelly the executive director of the NHL Players' Association passed along word through a spokesman that the union will be watching "very carefully."In the meantime Daly said the club's budget for the 2009-10 season is still being worked out between the league and current owner Jerry Moyes who stopped paying the bills last season and put the club into bankruptcy. Daly would not give a number for the Coyotes' player salaries but did say "I do not anticipate mandating a minimum payroll."So it is still to be seen if the team will use the mythical phoenix bird for marketing with the team remaining or if the franchise will be moved.