In re Johnson

Debtor, a professional hockey player with the NHL’s Columbus Blue Jackets, filed a voluntary Chapter 11 bankruptcy petition. His Player Contract ends with the 2017–18 NHL season. He had $21,343,723.64 in pre-petition debt. The bankruptcy court denied a subsequent motion to convert to chapter 7 based on Debtor’s bad faith conduct and failure to abide by his fiduciary duties. Debtor and six creditors holding more than $12 million of debt settled. Under the Confirmed Plan, Debtor was required to use post-petition earnings existing as of the Plan's effective date to pay secured creditors the value of their collateral, in kind or in cash payments. Allowed General Unsecured Claims were paid a 35% dividend, bringing them on par with the settling creditors, and claims of $1,000 or less were paid the lesser of their claim or $500. When Debtor’s current Player Contract ends, Debtor must contribute his net earnings (minus living expenses) from any source up to the fifth anniversary of the confirmation order. The Sixth Circuit Bankruptcy Appellate Panel dismissed an appeal as equitably moot. Property has been transferred, a trust has been established and a trustee appointed. Distributions have commenced. That final funding will not occur until future income is received does not alter the fact that all property proposed by the plan to be transferred from debtor’s bankruptcy estate as of the Effective Date was transferred. View "In re Johnson" on Justia Law