AHL suspends Iowa Chops from playing in 2009-10 season

By Tom Witosky, Des Moines Register.com  Published on: Wednesday June 17, 2009

The Iowa Chops hockey franchise has been suspended from operating next season as a result of a violation of the league’s rules.

Dave Andrews, AHL president and chief executive officer, said the franchise, which began play in 2005-06 season, has been “involuntarily suspended” from operating in a vote Monday by the AHL Board of Governors.

"The Iowa franchise has unfortunately been unable to remedy certain violations of the provisions of the league's constitution and bylaws," Andrews said.

Andrews declined to cite the specific violation, but the Des Moines Register reported last month that the club had used the franchise as collateral to obtain a loan in March 2008 from a North Carolina branch of Wachovia Bank. Records obtained from Polk County have disclosed the loan amounted to $1.99 million and was used to cover operating costs.

Andrews has said such loans are not permitted under league rules.

The league’s announcement officially ends any possibility of the franchise playing hockey this winter in Des Moines, but could further complicate an increasingly murky legal situation revolving around the future of the AHL in the city.

The Des Moines AHL franchise has been the cornerstone tenant for the $217 million Iowa Event Center and its loss could result in the public events venue beginning again to run a deficit. Suite leases permit companies that rent suites at a cost from $35,000 to $50,000 annually to end their agreements if an AHL team “permanently ceases” to operate at Wells Fargo Arena.

Nothing in the league’s decision prohibits the team from being sold to another potential owner. The league had the right to terminate the franchise, but chose, instead, to suspend it as a means to prompt either the sale or to have its current owners operate the franchise in compliance with league rules, league officials said.

But a Polk County District Court judge approved an injunction last week keeping the franchise from being moved from Des Moines. That move, if allowed to stand, could prevent the sale.

Polk County officials have hinted that they intend to prevent the sale of the franchise unless the new owners honor a non-relocation agreement signed by the current owners.

The franchise owners, Dallas businessmen Bob and Kirby Schlegel, are attempting to sell the franchise after losing close to $4 million over the past four seasons. The Schlegels, along with minority owner Howard Baldwin, own the Des Moines franchise as owners of DM Hockey Holdings LLC.

Last week, Nick Foley, an attorney representing DM Hockey, said the owners intended to pursue sale of the team and hoped that a legal battle could be avoided. He said county officials had rejected two offers from the team’s owners that would have helped ease the loss of the team and left the club owners with no other choice than to sell the club.

Foley said the owners believe that the franchise will be relocated by whoever buys the team.