Judge approves Michael Vick’s $20M bankruptcy plan

NEWPORT NEWS, Va. (AP)—A judge on Thursday approved Michael Vick’s(notes) plan to repay creditors $20 million and emerge from bankruptcy, and the quarterback hustled out of court to prepare for his return to an NFL field later in the night with the Philadelphia Eagles.

U.S. Bankruptcy Judge Frank J. Santoro said while Vick is “at the pinnacle of his profession,” he has proven unable to manage his finances in the past and ordered him to retain a financial planner as a condition of approval. The reorganization was overwhelmingly approved in a ballot of creditors and by their representatives in court.

Vick, 29, left the court soon after with his fiancee, Kijafa Frink, to catch a flight back to Philadelphia and make his debut with the Eagles in a preseason game. He was released from federal custody July 20 after serving 18 months of a 23-month sentence for his role in running a dogfighting ring.

“I’m happy it’s over. I can move on with my life,” said Vick, who was beaming as he left the courthouse. “I think my lawyers did a great job. I commend the judge. I commend the creditors’ committee, everybody. We finally got it all together. I’m just happy we can move forward.”

The plan approved by Santoro was supported by all but one creditor, which is owed $13,000. It hinges on Vick liquidating an estimated $9 million in assets, including houses, boats and high-end sport utility vehicles and future NFL earnings. He would not have to pay creditors during the first year with the Eagles. If successful, creditors would be paid in six years.

Vick was briefly questioned by one of his attorneys to establish his employment.

“What do you for a living?” Paul Campsen asked Vick.

“Quarterback,” he replied in a hushed voice.

Most of the hearing was devoted to a thicket of financial details, a parade of lawyers to the bar, and detailed estimates on Vick’s future earnings. As an Atlanta Falcon, Vick was once the highest paid player in the NFL.

“Do you think the plan is feasible?” the judge asked Ira M. Spiegel, a financial adviser who had examined the reorganization plan and will advise Vick in the future.

“Yes, I do,” he replied.

“Would it be pretty safe bet you’d be putting Mr. Vick on a budget?” the judge asked.

“Yes,” Spiegel replied.

After paying creditors and investing his earnings, Vick would have annual living expenses of $300,000, Spiegel said.

Future payments would depend on Vick’s salary, with creditors getting payments based on how much Vick earns. The Eagles have a $5.2 million option for next year, not including incentives.

Vick estimated his football earnings over the next few years as $5 million annually, with the potential of earning $8 million in 2010 with incentives.

While Santoro questioned Vick’s lawyers on what would happen if he could not repay his creditors and had to default, a lawyer for one of the creditors shrugged off the prospect.

“We know where we can find him,” Ross Reeves said. “We think there’s actually a considerable opportunity for everyone to be paid in full.”

Creditors ranging from banks holding mortgages on Vick houses to his former team, the Atlanta Falcons, endorsed Vick’s plan to repay them. He also owes more than $600,000 in federal taxes.

A lawyer representing one group of creditors on Wednesday called Vick’s signing by the Eagles “a huge development in the case.”

Vick is eligible to play the final two preseason games, but not in the regular season. NFL commissioner Roger Goodell said he would consider Vick for full reinstatement by no later than Week 6, in mid-October.

Besides his creditors, Vick ultimately will face legal bills approaching $2 million for his bankruptcy team.