Bankruptcy

Michael Vick?s NFL Reinstatement to be used in Bankruptcy Case

By meaghano

The sports world is abuzz with the recent announcement by NFL commissioner Roger Goodell that Michael Vick will be allowed to play professional football this fall.

The reinstatement is the latest in a long and winding series of events and fall from grace for the former Atlanta Falcons who was so popular his image graced the cover of video games.

Vick recently finished serving a 23-month prison sentence for charges related to the illegal dog-fighting operation he ran out of his house. Shortly after the charges were announced he was suspended indefinitely from the NFL by Goodell.

The reinstatment could have huge implications on Vick’s bankruptcy plan. Vick filed bankruptcy on more than $20 million in debt. He lists $16 million in assets, but is trying to keep many of his assets.

In April, a judge rejected Vick’s Chapter 11 bankruptcy. A chapter 11 is rare for individuals, but Vick’s case is somewhat unique do to the size of his estate and debts, and his desire to retain property.

But the plan involved a $1 million payment to his creditors upfront, and that was cash Vick didn’t have. He tried to auction off one of his homes, but no bids were made on the $3.2 million residence.

A new bankruptcy plan is built around his ability to once again earn big bucks in professional. Before his arrest, Vick was in the middle of a 10-year, $130 million contract.

But it’s unlikely he’ll be able to command those dollars again. Several teams, including his former team the Atlanta Falcons, have already said they aren’t interested in signing the quarterback.

But there’s still a good chance that one of NFL’s 32 teams will take a chance on the former star, even though he hasn’t played since the 2006 season.

Full post as published by The Bankruptcy Blog on July 28, 2009 (boomark / email).