Vick bankruptcy plan offers more to creditors
LARRY O'DELL | 7/2/2009, 7:44 a.m.
NORFOLK, Va. (AP) -- Michael Vick's revised bankruptcy plan would funnel more of his future pay to his creditors and ensure that they receive a portion of his earnings even if the suspended NFL star doesn't return to the league.
Vick attorney Paul Campsen outlined the highlights of the new plan, which was still being drafted, at a status hearing Tuesday. Campsen assured U.S. Bankruptcy Judge Frank J. Santoro that he will have no trouble filing the document by Thursday's deadline.
Santoro in April rejected Vick's first Chapter 11 plan, saying it was not feasible. Among his concerns was that the plan depended heavily on Vick returning to the NFL and that Vick was trying to hang on to too many assets. His first bankruptcy plan would have allowed him to keep the first $750,000 of his annual salary, and Vick also intended to keep two houses and several cars.
Under the new plan, 10 percent of the first $750,000 Vick earns would go to creditors, and he's agreed to liquidate a house under construction in Virginia. If Vick doesn't return to the NFL, the new plan would give creditors a portion of whatever he earns from a lower paying job.
His prospects for playing again in the NFL rest with league commissioner Roger Goodell, who has said he will review the matter after Vick completes his 23-month federal sentence for operating a dogfighting ring.
Vick, who is serving the last two months of his sentence on home confinement in Hampton, is scheduled to be released from federal custody July 20. He did not attend the hearing, which came a day after he began a new job with the Boys and Girls Clubs. He had been earning $10 an hour in a construction job since leaving the federal penitentiary in Leavenworth, Kan., in May.
Steven S. Kast, chief executive officer of the Boys and Girls Clubs of the Virginia Peninsula, said Vick will work with children in health and fitness programs for a few weeks.
"We were disappointed by some of his recent actions and decisions, but believe he has learned from these experiences, and is now conscious of his obligations and responsibilities as a prominent sports figure that impacts and influences our kids," Kast said in a written statement.
Vick's legal troubles wrecked his finances as well as his reputation. Once the NFL's highest-paid player, Vick filed for Chapter 11 bankruptcy protection in July 2008, listing assets of $16 million and liabilities of $20.4 million.
Under the bankruptcy plan, creditors would get a percentage of any income above $750,000 per year, and their cut has increased under the revisions. The sliding-scale percentages would be increased as follows:
- $750,000 to $2.5 million in earnings, from 20 percent under the old plan to 25 percent under the new one.
- $2.5 million to $10 million, from 25 percent to 30 percent.
- Over $10 million, from 33 percent to 40 percent.
Ross Reeves, attorney for a committee representing Vick's unsecured creditors, said the committee supports the plan.
"The committee's view has been that these numbers are based on Mr. Vick being highly incentivized not only to re-enter the NFL but to stick with it," Reeves said.
Campsen said Vick also will liquidate his $2 million home under construction in Suffolk. Santoro suggested in April that Vick sell one of his two Virginia homes. The Hampton home is assessed at $748,100, according to city tax records.
The revised plan also will settle a dispute between Vick and his former agent, Joel Enterprises Inc. Joel won a $4.6 million judgment against Vick in a breach of contract case and had been fighting to collect before the former Atlanta Falcons quarterback's unsecured creditors are paid. Campsen said Joel will now get $6 million but will be treated as an unsecured creditor, getting paid a little at a time.
Santoro also approved the sale of two bass boats and three larger fishing boats owned by Vick.
A confirmation hearing on Vick's new plan is tentatively scheduled for Aug. 27.
AP Sports Writer Hank Kurz Jr. in Richmond contributed to this report.