MANHATTAN (CN) - The National Hockey League says Phoenix Coyotes owner Jerry Moyes violated an agreement to keep the team in Phoenix by secretly courting a sale with a Canadian buyer, then declaring bankruptcy to push through the sale without league approval. The NHL seeks $12 million and punitive damages from Moyes, who made his fortune from the Swift Transportation trucking company.
Moyes bought a 92 percent interest in the Coyotes in September 2006.
Under the terms of the agreement, the Moyes family was forbidden to move the team out of Phoenix for 7 years, the NHL says in its complaint in New York County Court.
Defendants Moyes, his wife Vickie Moyes, and their Family Trust also were barred from entering into discussions with potential purchasers without NHL consent; promised that the team would have enough capital to pay expenses; and promised not to file for bankruptcy, the complaint states.
But in 2008, Moyes informed the NHL that the family would stop funding the Coyotes and asked that the NHL do it.
The NHL says it started paying for the Coyotes' operating expenses and found a potential buyer that signed a letter of intent to buy the team.
"Unbeknownst to the NHL, however, Moyes himself had also secretly entered into discussions regarding the potential sale of the Coyotes to an affiliate of Jim Balsillie, the founder of Blackberry maker Research in Motion," the NHL says.
Balsillie's affiliate, PSE Sports & Entertainment LP, is based in Southern Ontario.
The NHL says Moyes "lied" about his discussions with Balsillie and told him that he would file a bankruptcy petition for the Coyotes to push through the sale without league approval.
"On May 5, 2009, while the NHL Commissioner was in Phoenix to report to Moyes on the details of the proposed purchase of the Coyotes that the NHL had arranged, Moyes caused the Coyotes and the holding companies that own the equity in the Coyotes to file bankruptcy petitions," the complaint states. "Three days later, the Coyotes filed an antitrust lawsuit against the NHL."
In its bankruptcy petition, Moyes says the Coyotes owe former coach Wayne Gretzky $8 million in unpaid salary.
The NHL seeks $11.6 million from the Moyes family for breach of contract and breach of fiduciary duty, plus punitive damages.
It is represented by Bradley Ruskin with Proskauer Rose.
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