Monday, August 29, 2011

Michael Vick Signs New Contract, Should Be Able To Pay Off Bankruptcy Early Now

I can't help it that the bankruptcy was the first thing that I thought of when I heard today that Michael Vick got his new 6-year, $100 million contract.

After all, that's one of Vick's continued reminders of the mistakes of the past and it limits him greatly.  In July of 2008, in the wake of Vick being convicted of federal dogfighting charges the previous year (among other things), Vick filed for Chapter 11.   His debts were reorganized and a payment plan set up in according with the court.  Despite his sordid past, I commend him for filing Chapter 11 instead of Chapter 8, which would have allowed him to walk away from all of his debts.

In the structured court repayment plan, it is estimated that Vick will pay his creditors over $12 million between now and 2015 when he is due to come out of bankruptcy.  In his new contract, Vick will get $40 million guaranteed and an average of $16.7 million base salary.  In 2011, his actual base salary will be $14.4 million, lower than the $16 million he was going to get paid as part of the franchise tender he signed in January.  In this deal, the Eagles actually save cap space this year.

In accordance with the bankruptcy plan, Vick will be ordered to use 40% of the money he makes this year to pay his creditors.  That tallies up to $5.76 million in paid debts (almost enough to pay the Atlanta Falcons, who are awaiting a repayment of between $6.5 - $7.5 million for part of his signing bonus from his 2004 contract).  However, there is also a court-derived budget that Vick must follow which details how much money he can spent on rent, other living expenses, and helping his mom.

So it would seem that this contract will allow him to get himself out of bankruptcy and still have a decent amount of money left over  in the next few years (if he chooses to pay his bankruptcy off early, which he should; it would be a huge burden lifted).  Vick has continued to turn his life around, and hopefully when he is free and clear of the bankruptcy, he will continue to make good choices in his life.  

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