CBJ's Jack Johnson bankrupt

[AtlanticRiderFan]

Apparently Jack Johnson's parents used his money to buy a house in California, a car, and travel. So now he claims only $50 000 with $10M-$15M in debt.

 

What kind of parents does something cruel like that to their son? That's abuse.

 

http://m.espn.go.com/nhl/story?storyId=11908361&src=desktop&rand=ref~%7B%22ref%22%3A%22https%3A%2F%2Fwww.google.ca%2F%22%7D&wjb

[Jpan85]

Need to watch 30 for 30 Broke it happens way more than anyone knows.

[iso_55]

Mom had Power of Attorney. She should go to jail. 

[Brandon]

This happens all the time with black athletes so it's nothing new.

 

I am just curious on how the guy had no clue that his parents were blowing all the money,  wouldn't he say something after being even 1 million in debt?

[Rich]

They had power of attorney so my guess is that he signed everything over to them to manage and had no clue about what they were doing.

[sweep the leg]

Thankfully he's still relatively young and has enough time to make a lot of money in his career. If nothing else, it's good to see his parents publicly shamed for this. Hopefully there's something criminal in this situation so they can be charged and or sued.

 

Young athletes being taken advantage of by their families is by no means a new story. Ryan Howard is going through the same thing right now. The only difference is he caught on to what was happening before he lost everything.

[iso_55]

He doesn't want criminal charges brought against his parents because his 16 year old brother still lives with them. He trusted his parents & they betrayed him. They should go to jail. 

[FrostyWinnipeg]

They would have had to buy what a $10-15m home?

[The Unknown Poster]

It was a $1.6 million home or something like that. What happened is Jounson fired his agent and was basically taken in by unscrupulous people. When he signed his $30 million deal his parents were talked into monetizing his contract. In other words they could borrow against his future earnings.

So even though they only spent a few million it was the Lon shark type inyerest rates. I heard one was something like $3 million at 24% interest or something. It sounds like his parents got into a hole and then tried to borrow their way out.

[iso_55]

But they used their son's money which is unconscionable. 

[Rod Black]

Parents do this to their son. Regardless of his age. Parents only want the best. So disappointing.

[Brandon]

Many many NHL parents handle their sons finances... I'm guessing this guys parents were just total morons. 

[BomberFan]

Many many NHL parents handle their sons finances... I'm guessing this guys parents were just total morons. 

Well that doesn't seem to be the norm, rather the exception. Not morons, thieves.

[The Unknown Poster]

 

Many many NHL parents handle their sons finances... I'm guessing this guys parents were just total morons. 

Well that doesn't seem to be the norm, rather the exception. Not morons, thieves.

 

Im not sure we can say his parents were malicious.  They certainly used his money to their benefit but to a degree that was manageble if they were smart.  A $1,8 million home?  Manageable.  Couple of cars?  No problem.  They took out bad loans to pay off other bad loans.  Spiraled out of control.

 

I think some parents look at their kids' success as a group effort.  No doubt the parents made sacrifices and spent a lot of money developing their kids' skills.  Its when they start having an air of entitlement about it that problems can arise.  You see it with kid actors too.  This isn't a rare thing.

 

The good thing is, Jack Johnson is young and will likely make many more millions and be fine.

[The Unknown Poster]

TSN

 

Bankrupt NHL star defenceman Jack Johnson is accused of being in cahoots with his parents in taking out a string of high-interest loans.

RFF Family Partnerships, a California-based marketing company which is among Johnson’s largest creditors in his bankruptcy case, accuses the Columbus Blue Jacket of committing “false representation and/or actual fraud” during the year-old case.

Johnson shocked the hockey world nearly a year ago when he filed for bankruptcy, disclosing that he had amassed more than $10 million worth of debt. In an even more startling twist, Johnson said his parents were to blame for his financial distress.

In a Columbus Dispatch story on Nov. 20, 2014, Johnson said he “picked the wrong people” to give him financial advice and in court documents, Johnson charged that his parents John and Kristina took out millions of dollars worth of high-interest-rate loans in his name, without his knowledge.

His parents, Johnson alleged, pledged his future NHL earnings as collateral for the loans.

While Johnson’s case has largely disappeared from the headlines over the past year, his venomous legal battle with his creditors continues. It’s been so contentious that lawyers for his creditors have asked the court for permission to question Johnson’s lawyers themselves over his decision to file for bankruptcy, an extraordinary measure.

Johnson has been forced to disclose minute details about his monthly expenses over the past year, filing his credit card and bank statements with the court each month, sharing details on everything from his purchases of food and gas to gifts. He’s also required to provide information about his NHL income and NHLPA retirement savings plans.

But in what sources close to Johnson say has been among the most difficult developments over the past year, the Blue Jackets defenceman has been accused of working alongside his parents to secure high-interest loans – allegations that are directly counter to his statements with the court.

Johnson’s agent, Pat Brisson, who has started working for the player again after a seven-year split, declined to comment.  Johnson’s lawyer Marc Kessler also declined to comment.

In 2011, three years after he fired Brisson and weeks before he signed a seven-year, $30.5-million contract with the Los Angeles Kings, Johnson signed a power of attorney that granted his mother full control of his finances.

The Columbus Dispatch reported it wasn’t long before his parents began to spend wildly.

Johnson’s parents allegedly each bought a car, and spent $800,000 on upgrades to a Manhattan Beach property, the Dispatch reported.

In a Dec. 24, 2014, court filing, Johnson said lenders took advantage of his mother’s “financial inexperience and naiveté.”

RFF Family Partnerships, the creditor, accuses Johnson of making “false representation and/or actual fraud” in the case and says Johnson owes the company $1.7 million on a loan that calls for him to pay 36 per cent annual interest.

RFF says Johnson and his father agreed to terms on a $1.9-million promissory note on Jan. 21, 2014, using his NHL contract as collateral.

According to documents filed in court by RFF, an Ohio notary public named Alonzo Longshore has sworn Johnson “personally appeared” before him in person in Franklin County, Ohio, on Jan. 23, 2014, and signed the Jan. 21, 2014, promissory note.

Longshore said Johnson also appeared before him the following day, on Jan. 24, 2014, to sign a document pledging his NHL contract as collateral for the loan.

“The documents were not ‘allegedly signed by Johnson’ (or by his parents without his knowledge) as Johnson asserted in his initial filings,” RFF lawyer Jeffrey Levinson wrote in an email to TSN. “Johnson admitted in his testimony (at trial and in depositions) that he personally signed both (the loan document and the document pledging his NHL contract as security) and he initialed every page of each document, met with representatives of RFF in Los Angeles, and received the money.

“The loan was a bridge loan to be paid back in 30 days,” Levinson wrote. “Johnson promised to but never paid it.”

Levinson said the dates were different on the Jan. 21 loan document and the notary public statement because Johnson forgot to sign a page.

“The documents were prepared on the 21st,” Levinson wrote in an email. “He signed the promissory note and the other documents on the 23rd. My client received them by FedEx on the 24th and noticed he forgot or failed to sign one of the documents. He went back to the notary and signed and Fedexed that document to us.”

RFF says that when Johnson signed the loan documents, he purposely avoided including any details about the prior loans he and his parents had allegedly taken out.

“This omission was done by (Johnson) for the purpose of improperly insulating his parents from litigation claims,” RFF said in a court document.

Johnson has not asked the court to demand his parents be forced to testify about the loans and has not demanded any documents from them related to the loans.

“There is nothing in the record (showing) any attempt whatsoever by (Johnson) to investigate the significant claims and causes of action against his advisors and parents,” RFF alleged.

A source close to Johnson confirmed that he did, indeed, sign the Jan. 21, 2014, promissory note.

“Of all the promissory notes, Johnson signed about half of them,” the source said. “His mother would send him just the signature page to sign. But he didn’t read what he was signing. He didn’t understand it. And he didn’t have any reason to mistrust his mother.”

Levinson wrote in an email that creditors are still investigating where the money lent to Johnson has gone.

“The real issue in this case is what Johnson and his parents did with the over $12 plus million they borrowed from all the creditors in this case (over and above the salary he was receiving and not using to pay the money back),” Levinson wrote.

“Despite a year to investigate and report to the court Johnson as the debtor in possession offers no explanation,” he wrote. “That is the real story and everyone has been looking for an answer since the beginning of this case. We do know they spent millions of dollars on luxury items, including two California homes, hundreds of thousands of dollars in improvements to his Ann Arbor home, jewelry, travel, two Ferraris, three BMWs, a Hummer, a $50,000 wedding while in bankruptcy etc. “

“Now, rather than doing the ‘right thing,’ as Johnson has said over and over again that he wants to do, he has spent more than a million dollars more on his attorneys trying to avoid paying the very debts he has admitted are his obligations,” Levinson wrote.

Johnson has spent months trying to convert his case from a Chapter 11 bankruptcy to a Chapter 7 bankruptcy and he spent about a day and a half testifying about his case during a three-day hearing in early September.

His parents were questioned by lawyers for creditors in August.
 

If his bid to convert his bankruptcy to Chapter 7 is successful, Johnson, who is scheduled to be paid a combined $15 million over the next three NHL seasons, would be able to keep those future earnings for himself, instead of being forced to commit some of his salary to repaying his former lenders, Buffalo bankruptcy lawyer Thomas Denny told TSN in an interview.

 

“If he goes through Chapter 7, he’ll probably have to liquidate most of what he has, but at the end of it, he gets a fresh start, his debt will be gone,” Denny said.

 

Chapter 11 proceedings can typically last three to six years, Denny said, compared to about six months for Chapter 7.

Johnson listed real estate in California ($1.65 million) and Michigan ($550,000), two 2007 BMW X5s, a 2012 BMW and a 2011 Ferrari as assets in a Dec. 31, 2014, financial balance sheet.

It’s unclear how much longer Johnson’s bankruptcy proceedings might last. He probably won’t find out whether he can convert his bankruptcy to Chapter 7 until the end of October.

[FrostyWinnipeg]

Should not be too hard to settle that debt considering his stats/age.

[The Unknown Poster]

Should not be too hard to settle that debt considering his stats/age.

Sounds like the issue is, he took out all this debt, never paid it back and now wants to move forward without having to pay it.  So the questions are, what did he do with all his money, why cant he pay back his legal obligations, why should he be able to move forward debt free making millions of dollars and not have to re-pay his lenders.

[The Unknown Poster]

TSN

Bankrupt NHL defenceman Jack Johnson, reduced to clipping coupons as he navigates his way through bankruptcy, has decided not to pursue a lawsuit against his spendthrift parents, according to court filings.

Documents recently filed in U.S. bankruptcy court detail the ongoing feud between Johnson and the loan companies who charge he owes them millions of dollars.

Johnson’s relationship with his parents Jack Sr. and Kristina has been “devastated” by his bankruptcy, the court filings say, but he has decided not to sue them because they “are trying to make enough money to live” and he’s unlikely to recover money or assets from them.

The court papers also describe what Johnson did after he learned in 2014 from the Columbus Blue Jackets - not his parents - about his financial problems.

Johnson shocked the hockey world nearly a year ago when he filed for bankruptcy, disclosing that he had amassed more than $10 million worth of debt. (His creditors now charge $21 million in claims have been asserted against Johnson.)

In a startling twist, Johnson said his parents were to blame for his financial distress.

Johnson has alleged that his parents took out millions of dollars’ worth of high-interest-rate loans in his name, without his knowledge. His parents, Johnson alleged, pledged his future NHL earnings as collateral for the loans.

Among the papers filed in court in recent weeks are documents that detail the testimony provided by Johnson and his parents

Johnson’s investigation of his parents’ alleged spending led to a meeting between them and his lawyer on Feb. 12, 2015, in Minneapolis.

During that meeting, Johnson’s parents explained their precarious finances. The last time Johnson’s father earned more than $100,000 was in 2006 or 2007. Since then, his income has been about $15,000 per year, for cutting down trees, shoveling garbage, washing cars, and “doing everything he can to put food on the table.”

“Mr. Johnson does not have any assets other than a Ferrari that is not in working condition,” a court filing says.

Johnson’s mother has similarly performed odd, part-time jobs.

“Although (Jack Johnson) determined that (he) has claims and causes of action against (his parents), (he) reasonably determined not to proceed with litigation against the Johnsons given their limited financial wherewithal and to avoid consuming estate assets pursuing an unlikely and speculative recovery at best,” Johnson’s lawyer wrote in a court filing

Johnson’s creditors have alleged the NHL star is working in cahoots with his parents, and knew about their borrowing. Earlier this year, one creditor, EOT Advisors, sued Johnson for fraud, asking a court to award the company more than $600,000.

Johnson says in court documents that the average career of a pro hockey player is “about five-and-a-half years” and that he granted his parents a power of attorney to help him “save money, invest money, make a profit, and grow because (he) didn’t know how long he’d get to play (in the NHL).”

Johnson’s parents have testified that they were first approached by loan brokers who promised “a surefire” method to make money after Johnson signed a seven-year, $30.5-million contract with the Los Angeles Kings on Jan. 8, 2011. Johnson was traded to the Blue Jackets in February, 2012.

Johnson first learned that “not all (his) ducks were in a row” at the end of the 2013-14 NHL season, when the Blue Jackets told him that the team had been contacted by one of his alleged creditors.

After getting engaged in May 2014, Johnson decided to “break off financially” from his parents and “start (his) own life.

He hired a business manager and learned that his parents had opened 17 bank accounts in his name, and had invested in real estate, life insurance, and jewellery.

Johnson, who is being paid $5 million this season by the Blue Jackets, says has engaged in financial “belt-tightening” to cut his monthly expenses.

He has moved from a downtown Columbus penthouse apartment where rent was $4,000 a month to a “modest home in the suburbs,” with a $2,700 monthly rent bill.

Johnson has also “stopped paying for entertainment for himself and with friends and ceased regular leisure travel,” the documents say. “(Johnson) also began using coupons and generally searching for more cost-effective purchases.”

While Johnson’s creditors allege he personally appeared before an Ohio notary public and signed at least one promissory note, Johnson says he was never provided with complete loan documents before he signed them.

Johnson’s gross income in October, 2015, was $764,646, but after taxes of $332,659, escrow deductions of $86,021 and other expenses such as NHLPA union dues ($600), Johnson’s net take home pay for the month was $338,311.

The documents also say he owns three BMWs and a 2011 Ferrari worth $193,000.

Creditors last week asked a judge to order Johnson to complete and file a full medical disclosure form. Johnson earlier pledged a life insurance policy as collateral for loans.

It's unclear when a judge might rule on Johnson's request to transfer his bankruptcy from Chapter 11 to Chapter 7.

If his request is granted, Johnson would be able to keep those future earnings for himself, instead of being forced to commit some of his salary to repaying his former lenders. Chapter 11 proceedings can typically last three to six years, compared to about six months for Chapter 7.

[Goalie]

This is what happens when you go from having no money to tons of money... Kind of half reminds me of the Native guy who won the Lotto 649 several years back, he won 50 million dollars, bought all his friends and familly new trucks and houses, bought a new house not far from my parents house actually, not that big of an expense actually, definitely not over a million dollars, probably closer to 500,000. Not bad but... 50 friends x 50,000 trucks... plus 50 friends x houses.... adds up. Years later, the guy ended up dying and was broke when he died, had nothing left cuz he drank it away, used drugs all the time... had nothing left.

 

Similar situations here... not saying that Johnson and his parents are similar but.... in a way, when you go from having nothing to an unlimited amount of money, you go crazy with it, always think it's gonna be there but what you don't realize is that it goes pretty quickly actually. 

[Brandon]

This happens to like 90% of black athletes.

It's just odd because usually hockey parents are smart with money.

[Mr Dee]

And I'm pretty sure you're 90% wrong.

[FrostyWinnipeg]

"Johnson’s net take home pay for the month was $338,311."

 

Damn, I wish I was bankrupt like Jack Johnson.

[Brandon]

And I'm pretty sure you're 90% wrong.

 

http://www.huffingtonpost.com/tyson-hartnett/why-athletes-go-broke-and_b_6812864.html

 

ESPN had a documentary about it....    

 

Also common sense...  Hockey is an expensive sport to play and usually families in poverty cannot afford to put a kid through hockey.

 

Boxing, basketball and football... these guys are coming straight from the ghetto from usually broken homes and very low income... they have zero knowledge of how to manage finances and of course so many of them go crazy and blow the money or get conned out of the money.

[Mr Dee]

And I'm pretty sure you're 90% wrong.

 

http://www.huffingtonpost.com/tyson-hartnett/why-athletes-go-broke-and_b_6812864.html 

ESPN had a documentary about it....    

 Also common sense...  Hockey is an expensive sport to play and usually families in poverty cannot afford to put a kid through hockey.

Boxing, basketball and football... these guys are coming straight from the ghetto from usually broken homes and very low income... they have zero knowledge of how to manage finances and of course so many of them go crazy and blow the money or get conned out of the money.

Your example is flawed. It's states SI did a study of former NFL and NBA players. That's all it said. Not how many or for how long. Even then, the percentage is well below what you stated and is not broken down by any racial identifications.

You're guessing.

I'm not saying players don't go broke, just your statement of 90% of black athletes go broke.

[Brandon]

 

 

And I'm pretty sure you're 90% wrong.

 

http://www.huffingtonpost.com/tyson-hartnett/why-athletes-go-broke-and_b_6812864.html 

ESPN had a documentary about it....    

 Also common sense...  Hockey is an expensive sport to play and usually families in poverty cannot afford to put a kid through hockey.

Boxing, basketball and football... these guys are coming straight from the ghetto from usually broken homes and very low income... they have zero knowledge of how to manage finances and of course so many of them go crazy and blow the money or get conned out of the money.

Your example is flawed. It's states SI did a study of former NFL and NBA players. That's all it said. Not how many or for how long. Even then, the percentage is well below what you stated and is not broken down by any racial identifications.

You're guessing.

I'm not saying players don't go broke, just your statement of 90% of black athletes go broke.

 

http://newamericamedia.org/2010/07/beyond-lebron----many-ex-ballers-broke.php

 

 

 

 

While Blacks make up only 13 percent of the United States population, Black athletes constitute 80 percent of the players in the NBA, 67 percent of the NFL and 9 percent of MLB.

 

Sorry the report said 80% of NFL athletes go broke within 5 years and black atheletes make up almost 70% of players in the NFL.   

 

I apologize for being slightly off resulting in your panties getting in a bunch.