Michael Vick's focus: Defenses and debt
Vick's attention this remarkable season is on more than just blitzes and pass coverage.
Starting at running back: LeSean McCoy.
Starting at wide receiver: DeSean Jackson.
Starting at reorganized debtor: Michael Vick.
That's the Philadelphia Eagles offense, at least in the view from our Courtside Seat. We exaggerate, of course, but it looks like the Eagles high-flying quarterback might not be getting much more than a quarter or so back from his paychecks right now.
We'll finish today with a cold beer (read on), but we start by
Throwing into dime, nickel and very big-bucks coverage
Michael Vick is having a remarkable season for the Eagles, strong enough to be considered a candidate to be the NFL's Most Valuable Player. His play on the field has been so dynamic that it's easy to forget the circumstances under which he returned to the league last year.
Maybe it's worth revisiting those circumstances. In fact, the incredible tangle of distractions that Vick still faces on a daily basis make his spectacular level of performance even more extraordinary. To wit:
• He is living on a court-ordered budget until 2015.
• The trustee in charge of his bankruptcy is suing everyone in his family.
• Vick is still trying to explain a missing $5 million.
• And nearly two-thirds of every dollar he earns goes to creditors and to taxes.
Despite his return to success on the field, Vick's world is radically different from the one in which he lived as the NFL's highest-paid player a few years ago, when he had five houses, eight or nine cars (Vick himself isn't sure of the number), a couple of pickup trucks, two fishing boats, a horse farm, and investments ranging from a high-end wine shop to a car rental agency.
Instead of sharing his abundance generously and haphazardly with a host of family and friends, Vick is now governed by a monthly budget that is buried deep in the thousands of documents filed in his bankruptcy case. It is part of a court-approved "reorganization plan" for his finances, a remarkably complex arrangement that is described in a dense, often impenetrable 112 pages.
Under the terms of the budget, he is permitted to spend $3,500 each month for rent in Philadelphia, with another $750 for "utilities and miscellaneous." There is no provision in the budget for buying dinner for his offensive linemen.
He is also obligated to pay $3,712 per month on the mortgage for the only remaining residence he owns, an unimpressive house in Hampton, Va., where his fiancée, Kijafa Frink, lives with the couple's two children, Jada and London. In a rare bit of extravagance, the budget permits Vick to pay $1,355 monthly for a private school for the children.
Although there is a budget provision for "living expenses," his car allowance is only $472 per month, a far cry from Vick's pre-arrest collection of F-450 pickups and $100,000 luxury automobiles.
Vick's mother, who was on his payroll in his previous professional life, is limited to $2,500 per month under the budget, a significant reduction from the salary and gifts Vick once bestowed upon her. He is also required to pay $3,000 per month to support former girlfriend Tameka Taylor and their son, Mitez.
The budget provides more generously for Vick's agent, Joel Segal, and for Vick's team of bankruptcy lawyers. Vick will pay Segal $32,500 this year, another $104,000 next year, and then $160,000 each year through 2015. It's a total of nearly $800,000.
The fees Vick will pay to the bankruptcy lawyers are scheduled to be $748,750 this year, another $1,058,080 next year and a total during the budget years of $2.6 million.
The budget is part of a plan that is supposed to allow him to pay off the debts he accumulated before his arrest. It's based on Vick's playing well enough to earn a bonanza free-agent contract at the end of the current season, and it provides for total payment to his creditors of more than $12 million between now and 2015.
As a "reorganized debtor," Vick's income will be distributed to his family and his creditors in accordance with a court-approved schedule. As his income increases, he pays more of it to the creditors. (See the accompanying table.)
Other People's Money
The more Michael Vick makes, the higher the percentage that goes somewhere other than into his pocket. Here's how it works
|Income||Percentage to Creditors|
|$750,001-$2.5 million||25 percent|
|$2,501,000-$10 million||30 percent|
|Above $10 million||40 percent|
His income is already increasing nicely. He made $1.6 million with the Eagles last season, and he is earning $5.25 million this year.
The payment requirements apply to any bonus that Vick can obtain in free agency, leaving him in a position where he will be paying nearly two-thirds of his bonus and income to the IRS and to his creditors.
If Vick wants to make any changes in this structure, he must ask U.S. Bankruptcy Judge Frank Santoro in Norfolk, Va., for approval, a process that will result in greater legal fees for Vick and in objections from more than a dozen lawyers representing his creditors.
On top of the budget restrictions and the attachments to his income, Vick and his family now face a demanding lawsuit from his trustee. The court-appointed trustee, Joseph Luzinski of Miami, wants Vick's family and friends to return nearly $5 million that Vick gave them in a frantic series of moves he made as he was entering bankruptcy and going away to the penitentiary for dogfighting. Although the trustee's lawsuit does not demand specific payments, other documents in the bankruptcy files describe in detail what Vick did with some of his money, and what the trustee wants to undo.
The trustee has sued Vick's mother, his friend Charles Reamon, the mothers of Vick's children, Vick's brother Marcus, and other friends and family; and he wants them to return everything Vick gave them during the few months before he declared bankruptcy.
Vick's payments during this spending frenzy include $1.8 million to Reamon, who acted as Vick's personal assistant and passed that money on to others; another $672,500 to Frink, his fiancée; the purchase of a building for a church in Hampton, Va., for $317,000; and payments of nearly $300,000 to two financial advisors who then lost or stole Vick's money.
Although the details are murky and occasionally inconsistent in the various court documents that describe Vick's pre-incarceration maneuvers, it appears that there is at least $1.4 million that is gone without explanation.
The laws of bankruptcy are not favorable to such pre-bankruptcy disbursements. The law favors equitable distribution of any assets among all creditors. There is little room for gifts to a favored few .
The trustee is likely to obtain a favorable ruling from Judge Santoro, but actual recapture of the money is less likely. The payments are nearly four years old, and most of the money is likely to be gone or untraceable.
The one Vick asset that might be recoverable and has increased in value is his collection of career memorabilia. In court papers, Vick and his attorneys assert that Vick gave everything to former Atlanta Falcons teammate Demorrio Williams, now a linebacker for the Kansas City Chiefs. Vick's trustee might soon be knocking on Williams' door and asking him to submit Vick's things to an auction.
Even as a "reorganized debtor," Vick's finances are so complex that he must be inundated each day with issues, decisions, court papers, e-mails, and phone calls from his lawyers, his family, his friends and his trustee. Even the simple action of selling his condominium on Alton Road in Miami Beach (sale price: $1.1 million) has resulted in nearly 300 pages of court documents and conflicting claims about where the money goes.
As he excels on the field, Vick is also redefining the word "distraction." He could easily have avoided most of this if he had submitted to a simpler bankruptcy procedure known as a Chapter 7 and stiffed all of his creditors. But, in a remarkable good-faith effort, he has chosen to try to pay his debts. It makes his achievements on the field even more impressive.
Let's play it by beer
Is a more American combination even remotely possible?
What started out as a routine renewal of Anheuser-Busch's role as the official beer of Major League Baseball has become a lawsuit in which the world's largest brewery accuses MLB of reneging on a deal and breaking off a 30-year partnership.
As they talked about a 31st year for Budweiser as baseball's beer, the two sides reached what appeared to be an agreement. They signed a seven-page document describing the basic terms of a new deal, and they sent e-mails congratulating each other.
All that remained to complete the arrangement was the drafting of a longer contract with the necessary technical terms. But Anheuser-Busch's suit states that when the brewery made a bigger deal with the NFL, baseball officials were suddenly unhappy with the terms of their contract.
According to various reports, the football contract called for the brewer to pay the NFL $43 million, while MLB was going to get only $10 million for essentially the same sponsorship opportunities. In its lawsuit, Anheuser-Busch asserts that on Oct. 5, 2010, MLB's lawyer sent a letter "complaining about the NFL sponsorship agreement" and threatening to take MLB's official beer sponsorship "to market." That means that MLB thinks it can do better with another beer.
When they realized at the Anheuser-Busch headquarters in St. Louis that MLB was about to talk with other brewers, they filed their lawsuit. They want a court injunction that will bar MLB from offering its beer sponsorship to anyone other than Anheuser-Busch, and they want a court judgment that the original seven-page basic terms agreement is a valid and binding contract.
U.S. District Court Judge Richard J. Sullivan in New York does not seem impressed with the gravity of the situation. He has set a date for "case management," a routinely used courthouse oxymoron that suggests that with a little "management," some angry people will somehow get together and settle things.
But for now, it's baseball and Budweiser staring each other down in court like Roy Halladay on the mound facing Joey Votto at the plate. Perhaps the principals should arrange for some celebrity to sing "The Star-Spangled Banner" to open each court session.
Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com.
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