Jack Johnson signed a seven-year, US$30.5-million contract with the Los Angeles Kings in 2011. Now with the Columbus Blue Jackets, he is set to add this year's $5 million salary to the more than $18 million he has earned in his NHL career.
And on Oct. 7, he filed for bankruptcy.
According to a report in the Columbus Dispatch, almost all of Johnson's money is gone. He claims less than $50,000 in assets and debts of more than $10 million in his bankruptcy filing. From the Dispatch:
The scene was nearly four years in the making, after a string of risky loans at high interest rates; defaults on those loans, resulting in huge fees and even higher interest rates; and three lawsuits against Johnson, two of which have been settled and one that's pending.
'I'd say I picked the wrong people who led me down the wrong path,' Johnson, a 27-year-old defenseman, told The Dispatch last week. 'I've got people in place who are going to fix everything now. It's something I should have done a long time ago.'
He has declined to comment further.
But sources close to Johnson have told The Dispatch that his own parents - Jack Sr. and Tina Johnson - are among the 'wrong people' who led him astray financially.
The Dispatch reports Johnson turned over control of his finances to his parents after firing agent Pat Brisson in 2008. According to court documents, Johnson's parents started borrowing money against his earnings two months after the defenceman signed his 2011 contract extension with the Kings. The first loan quickly went into default, and the situation spiralled out of control.
The Dispatch reports Tina Johnson borrowed at least $15 million against Jack Johnson's future earnings and took out as many as 18 high-interest loans that resulted in multiple defaults. Jack Sr. and Tina Johnson also allegedly each bought a car, and purchased a Manhattan Beach, Calif. house - 'with [Jack's] money but without his knowledge' - plus more than $800,000 in upgrades to the property.
Johnson has cut off contact with his family, the Dispatch reports. He has also hired an attorney and a new team of financial advisors in an attempt to find a way out of the mess.
'Intended or unintended, there are cases where there is a sense of entitlement among the parents of pro athletes,' Gary Marcinick, a partner at Columbus-based wealth-management firm Budros Ruhlin & Roe, told the Dispatch. 'It's more common than you think.
'The families have made great sacrifices to get these players where they are. That's the thought process. It's almost a tribal sense - that they're all in this together.'
Johnson's situation is the second case of a highly-paid athlete having issues with his family and finances to emerge in recent days. On Wednesday, it was announced that Phillies slugger Ryan Howard settled a legal battle with his family over its management of his finances and business affairs.
Court documents filed in federal court in St. Louis showed that RJH Enterprises, a firm set up to represent the former NL MVP's interests, and Howard's twin brother, Corey Howard, agreed to voluntarily dismiss the suit late last month after an out-of-court settlement was reached. At issue was a consulting agreement that Corey Howard entered into with RJH Enterprises. When Ryan Howard took steps in July 2012 to terminate the agreement, effective one year later in July 2013, his brother sued. Ryan Howard, a St. Louis native and star athlete at Missouri State University star, then alleged fraud and mismanagement in a countersuit.
Ryan Howard alleged in a countersuit that his twin brother 'engaged in a conspiracy' with relatives to defraud RJH.
The countersuit said Ryan Howard's father, Ron Howard, urged him to choose family instead of professionals to handle his personal affairs and operate RJH. His father acted as business manager, his mother, Cheryl as chief financial officer, Corey Howard as his personal assistant and other relatives performed other roles.
But the countersuit said Ryan Howard was concerned his family members were 'attempting to enrich themselves at his expense' and that his twin 'performed no significant services.' His mother, Cheryl Howard, authorized nearly $2.8 million in payments from RJH to relatives, but Ryan Howard said in the suit that he didn't know the amount of the payments until he took over the finances of RJH in July 2012.
The counter-suit said that when Ryan Howard said he wanted to 'have his family just be family,' his father, Ron Howard, responded that he should receive $5 million himself and that Cheryl Howard should receive another $5 million.
Post By http://sports.nationalpost.com/2014/11/20/columbus-blue-jackets-jack-johnson-files-for-bankruptcy-report/
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