After only serving 7 months of his 23 month jail sentence for Federal Dog Fighting charges, Michael Vick files for Chapter 11 Bankruptcy protection in the Eastern District of Virginia. He filed his Voluntary petition on July 7th, 2008. According to court records, Vick still has not filed the complete list of schedules. His attorney has scheduled a hearing for July 17th to allow the late filing of the schedules. Vick has filed his credit counseling certificate, list of 20 largest unsecured creditors (of which there is only 7 that total around 14 million dollars), and the creditor matrix.
Vick is attempting to appoint David Talbot as his "designated responsible person". According to court records, Talbot is a financial consultant that has represented several professional athletes, entertainers and business executives in the past. Talbot stated in court documents that he received a Mercedes Benz from Vick for payment of his services earlier this year. Talbot is to receive $15k a month for the life of the bankruptcy for being Vick's consultant.
Vick filed the bankruptcy to ultimately seek protection from one creditor, Joel Enterprises. According to court records, Vick had worked out agreements with all creditors except for Joel Enterprises. Joel Enterprise is owed 4.5 million dollars, the largest debt owed to any unsecured creditor listed. "Andrew Joel, a Richmond sports agent, filed a lawsuit against Vick in 2006 claiming he reneged on an endorsement deal agreed upon after leaving Virginia Tech early for the NFL." Joel Enterprises obtain numerous judgments in various parts of the country where Vick has real property. Vick filed the bankruptcy within 90 days of the judgments being docketed and therefore can now keep the judgments from being perfected. This will allow him to hold onto these assets and hopefully work out a deal with all of the creditors.
Chapter 11 is normally used by businesses to help them reorganize and consolidate their debt. Consumers can utilize Chapter 11 bankruptcy protection, especially when they either do not qualify for Chapter 13 and/or they have a significant number of assets that they do not want liquidated in a Chapter 7. Both of these seems to be true with Vick. His debt limit is to high for a chapter 13 and apparently he still has a significant number of assets that if he filed a Chapter 7, the Chapter 7 trustee would now control. The Chapter 11 requires that the debtor in possession have some sort of way to pay back the debts in his or her case. Without income right now nor in the foreseeable future, it may be impossible for Vick to be able to show that he can afford a confirmable Chapter 11 plan. That is why I believe that the bankruptcy filing was merely a way to stall creditor action, particularly Joel Enterprises, and allow Mr. Talbot to work his magic. We could see his case be voluntarily dismissed in the next few months.
One final note. In Vick's Motion to Appoint Mr. Talbot, Vick says that he hopes to "rebuild his life on a personal and spiritual level, resurrect his image as a public figure, and resolve matters with the NFL so that he can resume his career". I wish the guy well and hope he turns his life around. He may have a large battle to climb getting NFL commissioner Roger Goodell to reinstate him. He may still have to face a year suspension from the NFL once he his 23 month sentence is up.
Brian Limbocker
Limbocker Law Firm, LLC
2470 Windy Hill Road SE Suite 300
Marietta, GA 30067
Phone: 770-933-5355
http://www.limbockerlawfirm.com/
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