Creditors to vote on Vick bankruptcy plan
NEWPORT NEWS, Va. — Though a judge ruled that Michael Vick’s bankruptcy plan can be sent to creditors to vote on, it remains unclear how the out-of-work quarterback will get the income to pay them.
Vick declined to answer reporters’ questions before and after a hearing Friday on his Chapter 11 bankruptcy plan. U.S. Bankruptcy Judge Frank Santoro ruled that the plan can move forward after nobody objected.
The plan now goes to Vick’s creditors. After they vote, Santoro will conduct a confirmation hearing on Aug. 27.
Creditors approved Vick’s first plan, but Santoro rejected it in April, saying it was not feasible. This time, Vick has proposed selling off more assets and giving creditors a bigger cut of his future income.
But the plan is based largely on Vick’s prospective earnings from his goal of returning to the NFL, which still is not a sure thing.
NFL commissioner Roger Goodell conditionally reinstated Vick on Monday, a week after Vick completed his 23-month sentence for running a dogfighting ring. Goodell said Vick can sign with a team and begin playing by week six. Vick said Thursday that he is “getting close” to signing but did not offer any details.
Several NFL teams have said they’re not interested in signing the 29-year-old Vick.
“Mr. Vick’s time horizon in his professional career is not unlimited,” Santoro said.
The judge also postponed action on requests for payment by Vick’s attorneys, saying he wanted to wait until all the legal bills are in. A New York-based law firm is asking for $1.5 million after slashing its original request of nearly $2.7 million. A Norfolk firm is seeking $385,000.
Santoro demanded an explanation from one of the New York attorneys, Michael Blumenthal, on how his firm could bill Vick for 8,000 hours of work in less than a year.
“This case is probably the most difficult case I’ve ever been involved in,” Blumenthal said.
He noted that Vick was in the federal penitentiary in Leavenworth, Kan., when the bankruptcy petition was filed in July 2008, making attorney-client communication difficult. And Vick’s finances were in shambles, requiring a Herculean effort to track down assets, bank accounts and financial records.
“We started at below ground zero,” Blumenthal said, adding that five lawyers at his firm spent substantial time on the case.
Vick’s lawyers also endured an acrimonious battle, largely behind the scenes, with one of his major creditors — Joel Enterprises Inc., the company owned by Vick’s former agent. Joel objected at virtually every step on the bankruptcy process before the two sides finally settled their differences.
On another matter, Santoro rejected a motion for Blumenthal’s colleague, Peter Ginsberg, to withdraw from the case. The lawyers in Vick’s criminal case asked Ginsberg to withdraw after a federal appeals court upheld sanctions against him in an unrelated case in Florida. Ginsberg said he had not been actively involved in Vick’s case recently anyway.
Santoro said Ginsberg did nothing wrong in Virginia, and his troubles in Florida had no bearing on Vick’s case.