“In hockey parlance, the court is passing the puck to the NHL, who can decide to take another shot at the sale net or it can pass off the puck,” Judge Baum wrote on Wednesday.

Balsillie said he would not appeal the decision. In a statement, Balsillie said, “nobody can deny that we are now a big step closer to having a seventh NHL team in Canada.  It doesn’t matter who owns that team.  When that day comes, I will be the first in line to buy a ticket to the home opener.

“I want to take this opportunity to thank my family for all their love and support. I also want to thank the more than 200,000 fans who supported the bid online and the countless others who contacted me personally to show their support. This bid always was about the game we all love,” said Balsillie.

Judge Baum threw out the $242.5 million (US) bid by Balsillie, saying it could not work because he could not properly satisfy the NHL’s rights regarding relocation. “In the final analysis, the court cannot find or conclude that the interests of the NHL can be adequately protected if the Coyotes are moved to Hamilton without first having a final decision regarding the claimed rights of the NHL and the claims of the debtors and (Balsillie),” he ruled.

He then ruled that the NHL’s bid of $140 million would not work because it allows the league to specifically select which of the creditors will be paid. The NHL said it would pay all their creditors in full – with the exception of former head coach Wayne Gretzky and majority owner Jerry Moyes.

“There has been no determination that the Moyes and Gretzky claims are not ‘legitimate creditors.’ It would be inherently unjust for this court to deprive them of their possible rightful share of any proceeds without first providing all involved a fair trial on their claims.”

Baum’s 28-page ruling says the Balsillie bid was denied “with prejudice,” which means he cannot come back with an amended bid. As far as that bankruptcy court is concerned, it is done with him. The NHL offer was denied “without prejudice,” meaning that the door is open for league to come back to the court with an improved offer.

“We are pleased that the Bankruptcy Court has confirmed the League’s rights to select its owners and the location of its franchises,” Deputy Commissioner Bill Daly said in a statement regarding today’s ruling. ”We are reviewing the opinion and considering how we can best address the Court’s concerns regarding our offer to purchase the Coyotes. It remains our goal to secure the long-term stability of the Coyotes in Glendale.”

Judge Baum noted in his ruling that the Coyotes have total losses of over $390 million between 2004-08. He wrote that “the Coyotes have not been a particularly successful team on the ice having never won a playoff series since moving to Arizona. More importantly, from a bankruptcy perspective, the Coyotes have lost money every year since moving to Arizona.”

The Coyotes originally filed for Chapter 11 bankruptcy protection on May 5, opening the door for Balsillie to make an offer to buy the club. The initial offer of US$212.5-million was made, conditional on the team moving north to Southern Ontario.

The NHL quickly responded, claiming they had been in control of the franchise since November 2008. The league insisted that because they were running the team, majority owner Jerry Moyes did not have the right to file for bankruptcy.

A week later, Hamilton’s city council approved a lease deal that would leave the door open until October, for the Coyotes to call Copps Coliseum home. The NHL contended that that territory belonged to the league, making it impossible for the Moyes/Balsillie deal to be completed.

As Balsillie’s group pushed forward, they announced Labatt Breweries and Home Hardware as corporate sponsors if and when the team made its way to the Steeltown.

The NBA, NFL and Major League Baseball all voiced their support behind the NHL’s stance regarding ownership transfer and relocation. Each league provided documents urging the courts to help them set a precedent in these matters. Judge Baum ordered Moyes and the NHL into mediation to establish who was in charge of the team.

In late May, Balsillie filed an application to the NHL Board of Governors, asking them to approve him as a potential owner of the Phoenix franchise. Balsillie also announced a $150-million renovation plan for the aging Copps Coliseum, to upgrade the facilities.

While no resolution had determined, in June, Judge Baum stated that the NHL had a right to demand payment for a team moving into the territory of Southern Ontario.

By the end of July, the NHL Board of Governors had voted unanimously (26-0) to reject Balsillie as a potential owner.

As the issue hit a fever pitch, Balsillie requested that the U.S. Bankruptcy Court probe the reasoning as to why the NHL owners’ determined he was unfit to own a franchise in their league.

The league put their support behind the bid of Chicago Bulls and White Sox owner Jerry Reinsdorf in late July, but the bid was withdrawn on August 2. The NHL stepped up with their own bid of $140-million and another group, Ice Edge Holdings, also made a bid of $150-million.

The Ice Edge bid was short-lived and was withdrawn on September 9, after the group announced it was unable to work out a new arena lease with the city of Glendale.

As the date of the auction drew closer, Balsillie raised his bid to $242.5-million.

On the first day of the auction, Judge Baum told both bidders he might not award the team to either party.

Day 2 saw both sides make alterations to their respective bids. Balsillie adjusted his bid to ensure Glendale would receive $50-million if he was awarded the team and removed a deadline of September 21 for the sale to be completed.

The NHL changed their bid around so that $14-million of the money would be split between Moyes and Coyotes head coach Wayne Gretzky.

At the conclusion of the auction, Judge Baum made it clear he would take time to make his ruling. He said he wanted to word his decision clearly for the next court under the assumption the ruling would be appealed regardless of what it turned out to be.

The Coyotes opened camp on September 12, but Gretzky was not there due to uncertainty with his contract.

Phoenix was 36-39-7 last season and finished 13th in the Western Conference last season.

Source: TSN