Bankrupt Vick reaches settlement with Falcons
Michael Vick has agreed to pay the Atlanta Falcons at least $6.5 million US as part of his bankruptcy case, moving closer to cutting ties with a team that doesn't want him back.
The settlement was reached ahead of Vick's bankruptcy hearing in Virginia on Thursday. The suspended quarterback arrived in his home state Monday afternoon and was being held at Western Tidewater Regional Jail in Suffolk, Va.
The Falcons are trying to trade Vick, who is still barred from the NFL as he serves out a nearly two-year sentence for operating a gruesome dogfighting ring. If no deal is reached, Atlanta will likely cut its former star before the start of training camp.
"We were able to resolve our claim in a way that was acceptable to Michael and acceptable to us," Falcons president Rich McKay said. "It was just a good old-fashioned negotiation."
The Falcons settled their claim that Vick owed them nearly $21.2 million US for bonuses he received before his guilty plea to federal dogfighting charges.
After an arbitrator sided with the team, the players union took the case to federal court. A U.S. district judge reduced the amount to $3.75 million US, and the case remains on appeal.
"To resolve uncertainty over the amount of the Falcons' claim, the parties have determined that the Falcons will receive an allowed general unsecured claim in the debtor's bankruptcy case in the amount of $7.5 million," said the court filing, which was entered last week. "If the district court's ruling is ultimately affirmed on appeal, the amount of the Falcons' claim will be reduced to $6.5 million."
McKay said the settlement wouldn't necessarily speed up any decision to trade or cut Vick, though the Falcons' hierarchy — from owner Arthur Blank on down — has made it clear he will not play again for Atlanta.
Vick's bankruptcy lawyers, Peter Ginsberg and Paul Campsen, did not return immediately return telephone messages.
The suspended NFL star was being held in a general population block at the Suffolk jail but had limited contact with other inmates, said Lt. Tanya Scott, the facility's spokeswoman. She said one of Vick's lawyers met with him Tuesday, but he'd had no other visitors.
A bankruptcy judge in Newport News ordered Vick to testify in person at his hearing. He was required to pay the costs of his transfer from the federal penitentiary in Leavenworth, Kan., where he's been serving a 23-month sentence for his role in the dogfighting operation.
Vick has been approved for transfer to home confinement no sooner than May 21, about two months before his scheduled release from federal custody. After that, he hopes to resume his NFL career.
It won't be in Atlanta.
"We've stated our position pretty clearly on that," McKay said.
The Falcons are Vick's largest unsecured creditor. They would receive a pro-rated share of any future earnings he makes, but only after his secured creditors, such as banks and mortgage companies, are paid. Any money the team receives from Vick would be taken off their salary cap, though this is the final season they will take a significant hit, about $7 million US.
"This helps to clarify what were a lot of pending legal issues," McKay said.
Vick was once the NFL's highest-paid player, agreeing to a 10-year, $130-million US deal with the Falcons in December 2004. After he went to prison, the team filed a claim to recover bonuses he had earned from 2004 through 2007.
A court-appointed expert said the team should be repaid for roster bonuses Vick received, but U.S. District Judge David Doty ruled the team could only recover the signing bonuses, significantly reducing the amount.
The team has appealed to the 8th U.S. Circuit Court of Appeals. A ruling is expected in June, but it will merely set the final amount that Vick must pay the Falcons — $6.5 million US or $7.5 million US — while also establishing precedence for future cases.
With that issue resolved, Atlanta can move toward ridding itself of Vick. For now, the Falcons will continue to pursue trade talks, but no team has publicly expressed interest in the first NFL quarterback to rush for more than 1,000 yards in a season.
Vick hopes to resume his pro football career, with a large portion of his earnings set aside to resolve his bankruptcy case. NFL commissioner Roger Goodell has said he will review quarterback's indefinite suspension after he is released from prison.
Even if another team is willing to sign Vick, he will surely take a huge pay cut from his previous deal. He was due to receive a base salary of $9 million US and a bonus of $6.43 million US from the Falcons in 2009. The remainder of his Atlanta contract was worth at least $45.11 million US.
While Vick is still technically part of the team, the Falcons moved on a year ago when they drafted Matt Ryan with the No. 3 overall pick. He had a stellar debut season, leading Atlanta to an 11-5 record and an unexpected spot in the playoffs while earning The Associated Press offensive rookie of the year award.
Everyone in the organization looks forward to dealing with no more questions about Vick.
"I'm pretty much sure it's behind us now," running back Michael Turner said. "It's over."