USUALLY, THE OUTCOME of a bankruptcy proceeding depends largely on the positions taken by debtors and the pros and cons of liquidation versus debt restructuring.

Normally, Chapter 11 proceedings in the United States or their Canadian equivalent, actions under the Companies' Creditors Arrangement Act (CCAA), are launched as a vastly preferable alternative to liquidation of a firm's assets. They usually succeed when a restructuring plan looks viable, particularly if the public interest seems to favour the firm's survival.

That's what's almost certain to happen with the Chapter 11 proceeding sought by Chrysler, despite the unwillingness of some hedge-fund creditors to follow governments and unions in both the U.S. and Canada in converting their holdings into equity. And the same is true for the expected Chapter 11 filing by General Motors once the United Auto Workers and Canadian Auto Workers make enough fresh sacrifices to satisfy the Obama, Harper and McGuinty administrations.

Politics obviously will play a huge role in both proceedings because of the huge bailouts involved on both sides of the Canada-U.S. border and the enormity of the auto-industry job losses that would follow liquidations.

Politics of another kind are involved in a third high-profile Chapter 11 proceeding where, unlike their Chrysler and GM counterparts, the creditors are onside with the debtor company and there's a buyer who's willing and able to turn the outfit into a viable operation.

We refer, of course, to the National Hockey League's Phoenix Coyotes, the team that has consistently lost millions annually since moving to the Arizona city from Winnipeg in the mid-1990s.

Even with Wayne Gretzky as player turned-coach and a part owner of the team, the Coyotes have been in a hopeless state financially, partly because of a small fan base in that winterless part of North America and partly because its arena is in a suburb that's not easily reached by those living in most of the city that's currently the fifth largest in the U.S.

The would-be buyer is, of course, Ontario billionaire Jim Balsillie, who has agreed to pay $212.5 (US) million for the failing NHL franchise and wants to move the Coyotes to Hamilton's Copps Coliseum, where Southern Ontario hockey fans would surely fill every seat.

As much as this might be seen to be a winning situation for team majority owner Jerry Moyes, the other creditors and hockey generally, "politics" is likely to kill the deal.

The "politics" in this case is mainly in the NHL, where the top politician is its anti-Canadian commissioner, Gary Bettman, and his two main allies are the super-rich owners of the hapless Toronto Maple Leafs and the less wealthy owners of the Buffalo Sabres.

Mr. Bettman has asked the bankruptcy judge to throw out the Chapter 11 proceeding on grounds the league actually owns the team, having placed deputy commissioner Bill Daly in charge of the operation, while suggesting the league has another would-be buyer waiting in the wings in Jerry Reinsdorf, owner of the American League's Chicago White Sox and the National Basketball Association's Chicago Bulls.

As for the Leafs and Sabres, they have protection in the form of an anticompetition NHL rule barring a second team locating within 50 miles (80 kilometres) of an existing franchise.

It seemingly matters not that there is no evidence that the Hamilton-based Coyotes would pose any financial risks to the Leafs or Sabres, and plenty to suggest that the new rivalries would stimulate fan interest.

Nor is there really any need to prevent Phoenix from having its own NHL team.

All that's really needed is a decision by the NHL governors to permit a minor expansion of the league to 32 teams from the present 30, with new franchises in Phoenix and Winnipeg that would keep a balance (16-16) between its Eastern and Western conferences, and permit the top half in each conference to enter the playoffs.

It would give hockey-rabid fans in Central Canada as many teams to cheer for as are to be found in the Southeastern U.S., where currently two in Florida and one each in Georgia and North Carolina are all struggling financially.

If merely justice and fairness were to prevail, instead of protectionist politics, all Mr. Balsillie should have to do is agree to compensate the Leafs and Sabres for any loss of revenues that an arbitrator finds is caused by the added competition the Hamilton team produced.

Another thing we'd like to see is the restoration of hockey in Quebec City, where despite good fan support the Nordiques had to become the Colorado Rockies.

But that isn't going to happen, if only because the NHL wants to have the same number of teams in its two conferences, and Detroit, a 10-hour drive from the Atlantic seaboard, is already located within the NHL's "west".