The MOU wording wasn't particularly ambiguous:
Quote:
All Players on a Club's Reserve List and Restricted Free Agent List will be exmpt from the application of CBA 13.23 Waivers in the case of a mid-season signing.
For further clarity, if Club A trades such a Player to Club B and Club B signs the Player to an SPC, such Player will be exempt from the application of CBA 13.23.
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If the exemption applied to a team signing any player on any team's Reserve List (which is what the Flames seemed to argue) then the example in the second sentence wouldn't have been necessary. Why would it matter that a player was traded from Club A to Club B before the latter signed him if any player on any team's reserve list was exempt? Not to mention the final draft of the CBA made it abundantly clear what the intention of the negotiated rule was.
There are really 3 possibilities:
1) They didn't know about the rule.
2) They didn't realize O'Reilly had played KHL games after the lockout ended.
3) They were aware of both of the above, but were willing to gamble their 1st rounder and embarrass themselves publicly just to sign a guy to an offer sheet.
None of those scenarios speaks well of management's competence, but to me it's pretty obvious that scenarios 1 or 2 are the most likely.