Blue Jackets’ Jack Johnson Files for bankruptcy because of parents
There were reports coming out of Columbus on Thursday stating that Blue Jackets defensemen Jack Johnson has filed for bankruptcy. Johnson has earned over $18 million over the course of his career but has nothing to show for it. Unlike other high profile athletes that have declared bankruptcy, there is a rather sad twist to this story.
In 2008, Jack Johnson decided to give control of his finances to his parents, Jack Sr. and Tina Johnson. He also relieved the duties of his agent Pat Brisson. Brisson is also an agent for other NHL players such as Sidney Crosby and Patrick Kane. Never the less, it seemed like a good idea at the time.
However, it turned out that Johnson’s parents started monetizing his money, which is a method of borrowing funds against guaranteed salaries. During 2011, Jack Johnson signed a contract with the Los Angeles Kings worth $30.5 million dollars. Immediately after the signing, Jack Sr. and Tina Johnson started borrowing high interest loans from various different vendors by leveraging Jack Johnson’s contract.
Many of the vendors ended up suing Jack Johnson. The court garnished 25 percent of his wages bi-monthly to pay off the debts accumulated through the loans. In 2013, EOT Advisors, a company from Texas also sued him for $1 million for fraud. Jack Johnson has also sued a number of vendors involved in this case for damages and fraud.
It is devastating to see what happened to Jack Johnson. Pro athletes work their entire lives to earn these big contracts. In the past, we have seen many pro athletes declare bankruptcy. Lifestyle and overspending are usually the culprit in their financial downfall. What makes this story even more tragic is the fact that his parents, the people he trusted the most, were involved in all of this. Jack Johnson had this to say about the situation:
However, not all is lost. Jack Johnson still has a lot of hockey left in him. With three years remaining on his $30.5 million dollar deal and the right advice, he can recover from this financial situation.
Even though declaring bankruptcy does have a negative impact, it was done to protect Johnson’s financial future. He recently employed a team of professionals willing to help him out sort out his finances.
And not surprisingly, he has severed contact with his parents.
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