Jim Balsillie is resting one of his key legal arguments on a precedent set in 1970 when baseball's Seattle Pilots moved to Milwaukee to become the Brewers.
At the time, the Pilots were losing money and the club's owners, Pacific Northwest Sports Inc., struck a deal to sell the team for $10.8-million (all currency U.S.) to the Milwaukee Brewers Baseball Club Inc., which planned to move it to Milwaukee. The Brewers were controlled by Bud Selig, the current commissioner of Major League Baseball.
Local officials balked at the sale and tried to block it in court. Pacific Northwest put the club into bankruptcy protection, arguing the sale should go ahead in part because it would pay off creditors. City officials tried to block the sale under bankruptcy protection but the judge overseeing the case allowed the sale to proceed.
The judge noted the Pilots were insolvent and that it would take substantial advances from the American League to keep the club going.
The entire bankruptcy protection process took less than a month and the deal closed six days before the start of the baseball season, according to court filings.
Lawyers for Balsillie and Coyotes' majority owner Jerry Moyes say the case is almost identical to the situation involving the Coyotes.
One key difference is the role of the American League in the Pilots' case.
Unlike the Coyotes situation, where the NHL has not approved relocation, the American League approved the sale of the club after the bankruptcy proceedings began. But lawyers for Moyes argue the approval only came about because of the judge's decisive action. They say that prior to the bankruptcy protection filing, the American League had insisted it was necessary to keep the Pilots in Seattle.
Moyes' lawyers argue the Pilots case illustrates how quickly a bankruptcy court can sell and relocate a professional sports team. "This court can do the same," they argue referring to Judge Redfield T. Baum, who is hearing the Coyotes' case.
Paul Waldie