BANKRUPTCY UPDATES

• Court Approves Newspaper Magnate Lee Enterprises’ Bankruptcy Plan (February 07, 2012)
• Ireland Overhauls Bankruptcy Laws (February 06, 2012)
• IL State Representative Files for Chapter 13 Bankruptcy (February 08, 2012)
• Monk's Personal Bankruptcy Case Gets Stranger (February 01, 2012)
• Bankruptcy Filings by Big Companies Falls by 17 Percent (January 26, 2012)

Michael Vick Filing Bankruptcy from Prison

Disgraced NFL quarterback Michael Vick is making headlines again, this time for something far less sinister than dogfighting but almost as shocking. Vick, who set salary records before going to prison, is now filing bankruptcy while serving his sentence in federal prison, according to Bloomberg.com.

Vick filed Chapter 11 bankruptcy on July 7 in U.S. Bankruptcy Court in Newport News, Virginia. In the Michael Vick bankruptcy filing, he listed debts ranging from $10 million to $50 million and assets also worth millions of dollars.

Obviously, Vick's indictment on federal conspiracy charges related to the operation of a dogfighting ring has hurt him financially. He was suspended from the NFL without pay and sponsors, including Nike Inc., dropped him. Soon, he says, he could not cover all of his expenses and before long creditors came calling and filing lawsuits against him in attempts to collect what he owes them.

Vick's bankruptcy lawyers said in filing bankruptcy they hope Vick can get on the path to rebuild his life and finances. Vick hopes that after he finishes his prison sentence that he will be able to appeal to the NFL to let him resume his football career and improve his image.

In the 2001 NFL draft, Vick was the first pick for the Atlanta Falcons. He signed a record breaking six-year, $62 million rookie contract and received a $3 million signing bonus.

Almost immediately, he bought the property in Smithfield, Virginia for approximately $34,000 that became "Bad Newz Kennels." There pit bull dogs were raised to fight and dogfights were held with the dogs both on the property and in other states.

Bets on the dogfights could net hundreds to thousands of dollars for the winners. The losing dogs were often killed in cruel and inhumane ways if they survived the bloody fights.

During the operation of the dogfighting ring, Vick also excelled on the field. He earned three Pro Bowl selections and was featured on the cover of Electronic Arts Inc.'s "Madden 2004" edition, which is the best selling sports game in history. Vick's No. 7 jersey sold well and ranked as high as second in sales in the league.

Vick became the highest paid player in the NFL in 2004 when he signed a 10-year, $130 million contract extension. In 2006 ,Vick's fame soared even higher when he became the first quarterback in history to run for more than 1,000 yards in a season.

In July 2007, Vick's fantastic life began to crumble around him when he was indicted for conspiracy to travel in interstate commerce in aid of unlawful activities and to sponsor a dog in a dogfighting venture. In court documents, the dogfighting gambling operation were said to have purses as high as $26,000.

After Vick was indicted on the conspiracy charge, his sponsors started dropping like flies. Sales of Vick apparel, including jerseys and shoes, were suspended by both Nike and Reebok. Reebok also pulled Vick's uniform off the market even though there was not an individual endorsement or sponsorship agreement with him. Neither company wanted to be associated with Vick after the disturbing details of the dogfighting operation emerged.

Vick may also face serious state criminal charges for his role in the dogfighting ring.

Vick was then suspended from the NFL without pay in August 2007 after agreeing to a plea deal. He was sentenced to 23 months in prison in December 2007 and is currently serving his sentence at a U.S. penitentiary in Leavenworth, Kansas. He will be released in about a year.

Vick decided on filing bankruptcy after being unable to work out payment arrangements with his creditors. He owes the Atlanta Falcons $3.75 million for a "pro rated signing bonus", Royal Bank of Canada $2.5 million for a real estate loan, and sports agency Joel Enterprises Inc. $4.5 million for a breach of contract. The seven largest creditors listed in Vick's bankruptcy filing are collectively owed about $12.8 million.

Under Chapter 11 bankruptcy, Vick will be able to reorganize his debts and arrange payments through agreements with creditors and retain his assets.

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