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Coyotes confident in legal position, remain committed to market

Anaheim Ducks v Arizona Coyotes

Anaheim Ducks v Arizona Coyotes

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The day after the City of Glendale voted to end its arena-management agreement with the Arizona Coyotes, team co-owner, president and CEO Anthony LeBlanc outlined the club’s next steps during a conference call this afternoon.

According to LeBlanc, the Coyotes plan to file a temporary restraining order, followed by a request for injunctive relief, and finally a claim for damages. The lawsuit for damages could be for $200 million, according to the club’s lawyer.

“We feel fairly confident that we’ll have a positive outcome for our temporary restraining order and injunctive relief, which will provide a fair degree of certainty because that will allow us to operate without any questions or over hanging as we go through the due process through the court,” said LeBlanc during the conference call. (You can listen to the entire call here)

TSN business reporter Rick Westhead has the details on the city’s stance:

The departure of former city attorney Craig Tindall’s from his position more than two years ago was central to the argument to cancel the agreement.

Tindall was asked to resign as city attorney in February 2013 by Mayor Jerry Weiers. Tindall left his position on April 1, 2013, but accepted six months of severance, meaning he was on the city payroll through Oct. 1, 2013.

The city and Coyotes reached their arena management deal on July 2, 2013, when Tindall, who had gone to work for the Coyotes, was still being paid by the city.

The city in its vote Wednesday relied on state statute 38-511. That statute, which is included in the arena management deal, says that the state can cancel a contract within three years if anyone involved in negotiating or drafting the contract for the state or any public department, is an employee of any party to the contract (the Coyotes).

LeBlanc doesn’t believe the city has a case.

“This was an attempt by the City of Glendale, and in particular the mayor and vice mayor, to play strong arm tactics, to try to force us to renegotiate an agreement that was negotiated in good faith and that we had no breach whatsoever regardless of the rumors that were being spread,” LeBlanc said. “It’s somewhat ridiculous the stretch that is being made.

“This is a technicality that they’re trying to exploit, and I think our litigation team will do a good job of explaining that that is something that should not happen.”

According to LeBlanc, the events of the last few days have had a significant impact on the operation of the hockey club.

“Since this came down on Tuesday, it’s had a detrimental affect on our business,” he said. “I’m spending all day, all night, starting at 5 a.m. both mornings talking to sponsors, talking to season-ticket holders. It’s a constant stream of people that want to know what’s going on. They want to know if they can hold off on their payment. We’ve been working with potential new clients. Those are all on hold. The action that has been taken has been detrimental. Lets not forget, we’re a hockey team.

“We have a general manager who is getting ready for the most important part of the building of your team for the upcoming season. We have the draft in a couple of weeks (June 26-27). Then we have free agency opening (July 1). What this has done has made his job considerably more difficult especially in regards to free agency.This whole action has been resoundingly bad for the business of the Arizona Coyotes, which by the way, means its resoundingly bad for the City of Glendale because they make money off of revenue streams that we generate.”

Additionally, the club has withdrawn its bid to host the 2018 IIHF World Junior Hockey Championship.

As for the plan if things don’t go the Coyotes’ way in court, LeBlanc said the club has not thought of a Plan B (for example, relocation) to mitigate damages.

“I think our view is we feel confident in the TRO (temporary restraining order) and other filings we’ll be doing,” said LeBlanc. “We think that will mitigate our damages. We’re at the mercy of the court and we’re at the mercy of a judge. We feel very confident that we’ll have a strong case and the outcome will be positive, but if that goes sideways, so to speak, then we have to figure out what our Plan B is.”

The team currently has an out clause in its deal with the City of Glendale. When LeBlanc was asked about the possibility of calling it quits in Arizona, he was firm in his response.

“The answer is no,” he said. “We continue to believe very strongly in (Arizona) as a hockey market and we feel strongly that the actions taken by council last night were a violation of their obligation under the agreement, a blatant violation of their contractual obligations.

“The interesting side story that someone just pointed out to me is, everyone talks about the out clause that we have and if we wanted to pack up and leave, guess what? We have an out right now and we’re going the other way. We’re doing nothing but working aggressively to insure that we can stay in what we feel is our rightful home here at Gila River Arena.”

A Coyotes fan voiced her opinion on the mayor’s actions during the city council meeting on Wednesday night:

For its part the NHL is backing the Coyotes in their attempt to fight the City of Glendale. The league released the following statement Thursday afternoon:

The National Hockey League stands by, and will fully support, the Arizona Coyotes in their efforts to vindicate their contractual rights in response to last night’s outrageous and irresponsible action by the City of Glendale.

We continue to proceed on the basis that the Coyotes will remain in Glendale and will be playing their home games at Gila River Arena.

As for what happens next, LeBlanc expects the temporary restraining order to take effect quickly. The club has no future plans to meet with the city.

Related: NHL proceeding on basis that Coyotes will stay in Glendale

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