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Michael Vick files for bankruptcy

Former QB says he owes as much as $50 million to creditors

POSTED: July 12, 2008 5:01 a.m.
NEWPORT NEWS, Va. — Suspended and imprisoned NFL quarterback Michael Vick filed for bankruptcy protection Monday — a move designed to allow him to hold his real estate and other assets before a former agent begins collecting on a recent court judgment.

The filing in U.S. Bankruptcy Court in Newport News highlights the mounting financial pressures facing the Newport News native and former football star for Virginia Tech and the Atlanta Falcons.

In 2004, Vick signed a 10-year, $130 million contract extension, becoming the NFL's highest paid player. On Monday, while in prison in Kansas, Vick signed an altogether different form — one stating he had received "a certificate of counseling from a non-profit budget and credit counseling agency." Such counseling is now required of everyone filing for bankruptcy.

Vick, 28, was convicted last August for his role in a dogfighting ring centered at a property he owned on Moonlight Road in Surry County. Vick pleaded guilty to a dogfighting conspiracy charge and is serving a 23-month prison sentence. He's scheduled for release in the summer of 2009.

As a result of the scandal, the football star has lost not only his contract, but also endorsement deals with such marketing powerhouses as Nike and Reebok.

He also has to pay nearly $1 million for the long term care of his dogs, and is supposed to give back to the Falcons a $3.75 million portion of his signing bonus.

The bankruptcy paperwork, listing Vick's address as Haywagon Trail in Hampton, doesn't reveal exactly how much Vick is in debt.

In a series of checked boxes, the filing lists Vick's assets as being between $10 million to $50 million, with his liabilities also listed in that same range.

More detailed figures of both his holdings and his debt are expected to be disclosed as the case continues.

Vick's feud with his former business agent, Andrew Joel, of Joel Enterprises Inc. in Richmond, had been brewing long before the dogfighting issue erupted.

Vick terminated his contract with Joel in 2001, shortly after he signed his first NFL contract. Vick contended that Joel took advantage of him and got too high a percentage of his initial deal, so he signed with another agent instead. In November 2005, Joel filed a $45 million lawsuit against Vick in Richmond Circuit Court, citing breach of contract.

In April, following mediation, Joel won a $3.75 million judgment against Vick.

After that judgment, Joel became a "secured creditor" and automatically jumped to the top or near the top of the list of everyone to whom Vick owes money. That means he stands to get paid before many of the others.

Monday's bankruptcy filing, which came within the required 90 days of that court judgment, means Vick is protected from creditors — including Joel Enterprises — for now.

"The precipitating factor leading to the (Vick's) filing . . . is that one of the debtor's creditors, Joel Enterprises, docketed a judgment against Vick ... and has commenced collection activities," the bankruptcy filing says.

Vick had hoped to avoid bankruptcy "and work out consensual resolutions with each of his creditors who, other than Joel, have been quite cooperative," the filing says.

The bankruptcy case, the filing said, will establish one forum for Vick to handle all the claims against him, and will "provide a mechanism for Vick to recover assets from certain third-parties who may have taken advantage" of him. Those assets, the filing said, "will benefit all legitimate creditors."


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