Blazers, RCH in court

From The Daily News of Thursday, Aug. 9:

The ink hardly was dry on a B.C. Supreme Court ruling in Vancouver on
Wednesday and Tom Gaglardi, who heads up River City Hockey Inc. (RCH),
wanted to talk to Murray Owen, the president of the Kamloops Blazers Sports
Society.
“He did say a few words to me afterwards,” Owen said, “indicating to me that
he wanted to sit down and do some negotiating. I have a copy of his proposal
and I’m not sure if there’s room to move there at all.”
Gaglardi’s group, which includes ex-Blazers players Shane Doan, Jarome
Iginla, Mark Recchi and Darryl Sydor, didn’t put any pucks in the net
yesterday, but it did score a victory in the courtroom.
The society and RCH, which has made a $6.1-million offer to purchase the
franchise, had a difference of opinion on a constitutional matter and had
asked the court for a ruling. Both parties made their cases in Vancouver on
Friday.
The society’s opinion, which came from its legal adviser, Barry Carter of
the Kamloops firm MJB, was that it needed to change its consititution in
order to entertain offers and would need a special resolution to do so,
something that, under the Society Act that governs non-profit societies,
would need a 75 per cent majority.
RCH’s opinion, which came from Alan McEachern, a retired chief justice of
the B.C. Supreme Court, was that the society did not need to change its
constitution and that approval for a sale of assets needs only a general
resolution, meaning a simple majority, 50 per cent plus one, would do the
trick.
Madam Justice M. Marvyn Koenigsberg ruled yesterday that the society doesn’t need to change its
constitution and that, if it comes to a vote, members of the society need a
simple majority — 50 per cent plus one — to carry the day.
“We are pleased that the B.C. Supreme Court has confirmed this postion,”
Recchi said in a statement issued by RCH.
“We’re disappointed,” Owen said. “We’re still going through the process of
looking after the interest of the Blazers. The vote still has not been
taken. We’re in the process of trying to get together with (Carter) and
we’ll move forward from there.”
Asked if the society might appeal yesterday’s ruling, Owen said: “I don’t
think that’s in the cards at the moment.”
At issue was a clause from a special resolution to the society’s
constitution that was passed June 27, 1989, stating “the purposes of the
society are to own, manage and operate the Kamloops Junior Hockey Club and
to promote amateur and junior hockey in and around the City of Kamloops.”
Owen said the court is of the opinion that because of the existence of the
Kamloops Blazers Sports Foundation the board would be able to exercise its
mandate without its hockey team.
“They feel that the society could operate without the hockey club and focus
on its second purpose, the foundation,” he said. “We don’t like to think
that because we like to think that our society was primarily created to run
the hockey club. The foundation was there to keep attention away from the
fact the Blazers had made a certain amount of money and something needed to
be done with that.
“So we did something good and it has backfired on us in terms of this
thing.”
The foundation, which operates at arm’s length from the society, turns
profits from the Blazers back into the community in the form of grants to
various organizations.
The society’s board of directors now will call a meeting of members for
sometime during the week of Aug. 20, perhaps Aug. 23, which happens to be
the first day of the team’s training camp. At that meeting, the board is
expected to ask members if they want to sell the society’s assets.
The society’s board has had its accounting firm, KPMG, review RCH’s offer,
which is why Owen said he doesn’t know if there is room to negotiate.
However, according to RCH’s statement, “The KPMG review presented no issues
that could not be resolved through normal dialogue between the two groups.”
“We have once again asked the directors of the society,” Recchi said, “to
sit with us to discuss our offer so that the society members have confidence
that our offer has been fully reviewed when they vote at the membership
meeting the week of Aug. 20.”
And now there is another offer on the table, this one from Mike Priestner of
the Edmonton-based Mike Priestner Automotive Group.
“That’s another issue,” Owen said. “What do we do with the other offer?