NHL Sues Jerry Moyes Over Phoenix Coyotes

Just in time for the Phoenix Coyotes' stretch run to the playoffs (and an impressive amount of trade deadline moves), the Phoenix ownership situation is back in the news. Reuters is reporting that the NHL is suing Jerry Moyes:

The NHL filed its lawsuit with the New York State Supreme Court in Manhattan, where the league is based.

It accused Moyes of violating an agreement he had entered with the league by refusing to fund the Coyotes' obligations; secretly entering sale talks with Balsillie, who hoped to move the team to Hamilton, Ontario; and filing a bankruptcy petition to accomplish that sale without league approval.

According to the complaint, the NHL is seeking $30 million for violations of the agreement, $10 million for aiding and abetting violations of the Coyotes' fiduciary duty to the league, $10 million of punitive damages, and $11.6 million to cover amounts that the NHL paid to Coyotes creditors.

The NHL said it may also seek to recover $8 million that represents unpaid salary owed to Wayne Gretzky, the Hall of Fame center and former Coyotes coach. It said whether Gretzky is owed that money will be determined in the bankruptcy case.

The league's argument is that Moyes' action forced their hand into buying the franchise and devalued the team. I'm no legal expert, so I'm not going to try and decipher whether or not they have an argument. However, that view does seem to make sense. I have to think that if the whole Hamilton fiasco didn't happen, the team's attendance and reputation wouldn't have been hit quite as badly as it did, and that affects the sale value. The other stuff regarding the legality of the Jim Balsillie talks and bankruptcy petition, well, there's probably a lot of fine print in there that us lay folks don't understand.

For more on this, check out Travis Hair's opinion at the always-entertaining Five For Howling.