Peter Karmanos and Thomas Thewes, principals of Michigan-based Compuware Corp., Wednesday night were unanimously approved by the Connecticut Development Authority board of directors as the new owners of the Whalers.
The decision was not without some controversy. John Droney, attorney for the William F. Dowling group, which was bidding against Karmanos and Thewes, said he didn't believe his group was treated fairly.
It was other financial terms and the length of the commitment to remain in Hartford that left Droney angry.
Karmanos and Thewes have guaranteed the Whalers will remain at the Civic Center for at least four years. The Dowling group had said the team would stay in Hartford at least seven years.
Karmanos said Jim Rutherford, the group's chief hockey official and a former National Hockey League goaltender, would move to Hartford. Rutherford said he would be chief operating officer and team president, but there has been no decision on whether he would also be the general manager.
``We're really good at running hockey teams,'' Karmanos said. ``We know what we're doing. The CDA was looking for someone who had commitment to Hartford but also somebody who will be successful. The difference was what we were willing to do past the price. This is absolutely wonderful.''
Karmanos and Thewes offered a reported $22 million in cash up front, including $2 million Wednesday. The remaining $25.5 million would be financed through the CDA.
CDA Executive Director and President John Herndon said the decision to award the bid to Karmanos and Thewes was in part based on their hockey experience.
``We liked their very substantial background in hockey, very substantial knowledge of the sport and the sports franchise business, a very credible offer in terms of financial characteristics, a good deposit and a credit line put in place of $50 million,'' Herndon said.
As part of the six-hour meeting, Gordon, who had owned about 76 percent of the club, also had his agreement approved to sell the Whalers to the CDA for $45 million plus $2.5 million to cover losses. Gordon will pay 24 percent of that money to his corporate partners.
Technically, the CDA accepted the letter of intent and deposit subject to review of final documentation over the next few weeks. The CDA's decision also must be approved by the NHL Board of Governors and is expected to be done before the NHL draft, which is in Hartford June 28-29.
``We had two excellent proposals in front of us. We're very enthusiastic of the caliber of people and their commitment to success,'' Herndon said. ``It's a great deal for the state, Hartford and the Whalers.''
Sensing its original bid lagged behind Compuware's offer, Droney said the Dowling group Tuesday improved its bid to $29 million in cash at the closing and guaranteed to keep the team in Hartford for at least seven years.
``I don't know exactly what offer they accepted, but we thought we offered more money, offered to keep the team in Hartford longer. We thought it was quite reasonable that they would ask for information that would satisfy their bankers [ Bank of New York]. We were prepared to supply them with information with regards to letter of credit and financing arrangements that would satisfy them.''
Neither group knew until Tuesday night that they would be invited to the CDA meeting to make their bids in person. Both groups spent about an hour in the meeting. Gordon, meanwhile, was in Newport, R.I., and was ``happy'' with the arrangements of the sale.
The Compuware principals arrived about 3 p.m. and about an hour later headed out golfing to await word. They found out they won the bid at 8:30 p.m., as they came off the 18th green at the TPC at River Highlands in Cromwell.
The Dowling group arrived at 4:30. Besides Dowling, former vice president and general counsel of the New York Yankees, the group was known to include Michael Largue, of MAL & Associates, a New York international banking and financing firm; and a major Swiss investor who did not want to be identified publicly. Droney said the CDA was advised of all of the group's investors.
Dowling's group didn't go golfing.
``We waited in the commissioner's office for three hours and walked over here to find they already had made a decision,'' Droney said. ``We believe we were waiting to come back to be told exactly what we needed to supply them with by Friday at 10 a.m. Instead of that, they just decided to vote. You'd be upset, too. It's not fair. And it's not in the best interest of hockey in Hartford if you want to know the truth.''
``People who lose are never happy,'' Economic Development Commissioner Joseph McGee said. ``The board was very firm that they chose the most experienced, credible group. We think they will bring the energy and leadership to make the team a success. The board was very clear it had more information. They believed they went with the group with more management talent and a real commitment to hockey.''
The media were allowed into the meeting for its start at 2 p.m., but quickly exited when an executive session was called. The media were called back in for the vote. Just outside the board room, there was confusion. Members of the Dowling group weren't sure at first a vote was going to be taken. And when they found out they had lost, they were emotional.
``It was very discourteous and very unfair,'' Droney said. ``They didn't give us a chance to compete. It was ridiculous.''
Compuware has made bids on several NHL teams over the years and also made an unsuccessful bid on an expansion team in St. Petersburg, Fla., in December 1990. More recently, they struck a nonexclusive lease agreement with America West in Phoenix, Ariz., but Rutherford said either side can back out of that deal, and the Whalers' sale is unrelated.
Compuware Hockey Club consists of the Detroit Junior Wings of the Ontario Hockey, an ice arena, hockey schools, seven youth hockey teams and the Tier II junior Amabassadors, who recently won a national title. Rutherford, Compuware Hockey president, is considered a good hockey mind and has been mentioned for NHL general manager openings in the past.
``The difference really wasn't in dollars and cents,'' Rutherford said. ``It's what you bring to the table in terms of making a franchise successful. The price was established already and you were talking about a million here or there in financing. This is the end of a long road for us.''
From The Courant Archives: June 2, 1994