Bankruptcy judge rules that NHL not entitled to $145 million in damages from ex-Coyotes owner

Back in 2009 the NHL entered into a contract/agreement with Moyes to cover the Coyote's losses while he found a buyer for the team. At that time they were losing ~$50 million a year. As you may know, the Moyes were in talks with Balsillie who has been trying to buy an NHL team and move them to Hamilton, Ontario. The NHL, was like hell no but they kept negotiating a deal. Ultimately, Moyes couldn't keep operating the Yotes and they were forced to file a Chapter 11 bankruptcy which gave them some temporary relief from paying creditors and also means that the Bankruptcy Judge would have to approve the sale of the team. It was ultimately decided, by the NHL's showing that the sale to Balsillie was not allowed and they got a bid to purchase the Yotes confirmed by the Judge and makes a claim for the money they have been using to finance Moyes' losses.

Fastforward to 2013, the Bankruptcy judge rules in favor of the NHL for the covered losses. However, left undecided was whether the NHL is owed attorney's fees + expenses and the parties were contesting whether the some creditors were paid pursuant to the NHL purchase of the Yotes or as the NHL argued that the purchase agreement expressly says that Moyes will still be liable for the outstanding liabilities unless the NHL buys the claims (stands in their shoes). So the ruling today first states that the NHL cannot argue that the agreement does what they say it does because it is inconsistent with how the sale of Yotes was confirmed (this is overly simplistic and some legal professionals might say its so broad its incorrect, but if you are interest feel free to look up the doctrine of judicial estoppel in bankruptcy). Second, today's ruling held that the bulk of the NHL's attorney's fees and expenses are not recoverable under the Bankruptcy Code because they should have been filed as a claim when they assumed/assigned all the Yote's contracts and they failed to do so at that time. In addition, the Judge again held that the NHL shouldn't be awarded fees on the same judicial estoppel ground (inconsistent positions throughout the process). The remaining fees are recoverable.

To make matters even more confusing (and in turn more expensive for the parties) the US Supreme Court has issued 2 opinions (Stern and Arkinson and a current pending case Sharif) in the past four years that leaves open if question if a Bankruptcy Judge even has the authority to make a final ruling on these matters because they derive directly out of state law. Thus, the District court will have to affirm these findings after their own review.

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