Many Maryland hockey fans are familiar with Jack Johnson, a defenseman in the National Hockey League. Johnson has made recent headline not for his skills on the ice, but over what has become a very contentious consumer bankruptcy filing. Most recently, Johnson is trying to convert his Chapter 11 filing into a Chapter 7 case, in the hopes of eliminating a large portion of his debt through liquidation, rather than repayment.
Johnson owes more than $15 million, much of which is held within loans for which Johnson and his parents signed. Within the bankruptcy filing, Johnson has alleged that his parents had control over his finances for a period of time and did not act in his best interests when taking out those loans. However, attorneys for his creditors argue that he has taken no legal action to hold his parents accountable or seek the return of any of the money owed.
Johnson’s creditors are fighting against the conversion of the bankruptcy from Chapter 11 to Chapter 7. This is largely due to the fact that Johnson has a hockey contract that will pay him $15 million over the course of the next three years. The creditors feel that Johnson’s attempt to convert to Chapter 7 is an effort to have his debts discharged, when he has the ability to repay those obligations.
In making that argument, the creditors are trying to convince the court that Johnson has made no effort to curtail his spending since the time the consumer bankruptcy case was filed. His expenses range from paying for his brother’s private school tuition to approximately $50,000 for his recent wedding. The judge in the case has not yet issued a ruling on whether Johnson will be allowed to convert from a Chapter 11 to a Chapter 7 bankruptcy, but a recent attempt to issue a protective order for Johnson’s parents that would limit their testimony in court was denied. Maryland hockey fans will have to stay tuned to see how the matter is ultimately resolved.
Source: deadspin.com, “Jack Johnson Is Fighting For His Contract In Bankruptcy Court”, Samer Kalaf, Sept. 7, 2015