Former hockey star JMFJ files for bankruptcy

Submitted by MHNet on

http://bluejacketsxtra.dispatch.com/content/stories/2014/11/20/blind-sided.html?utm_medium=twitter&utm_source=twitterfeed

The Columbus Dispatch reports on Blue Jackets' defenseman Jack Johnson filing for bankruptcy and his path down financial ruin, which leads back to his time in Ann Arbor.

And it was at Michigan, sources say, that Johnson’s path to financial ruin began.

Maurice Taylor, a star basketball player at Michigan from 1994 to ’97 who was later disassociated by the school after a string of NCAA violations, steered Johnson and his family toward Simon Vo, who was to serve as Johnson’s business manager after Johnson fired Brisson, the agent.

Johnson had been paid relatively modest salaries early in his career, earning a high of $1.6 million in his fourth season in the league.

In the months leading up to his $30.5 million deal with the Kings, however, Vo and Steve Miller, who owned a mortgage company in Los Angeles, began discussing with Johnson’s parents the idea of “monetizing” Johnson’s contract, sources said.

“Monetizing” — that is, borrowing against guaranteed future salaries — has led to the financial woes of many professional athletes.

JMFJ signed a power of attorney that granted his mother full control of his finances and his parents started taking out loans in his name without his knowledge.  He's now $10-15 million in debt, been sued three times, and has reportedly cut off all contact with his family.

“I’ve seen lots of instances of parents riding their kid’s coattails around,” said an NHL executive familiar with the case. “I’ve never seen a case as ugly as this one, where the parents took such advantage of their kid.”

Bando Calrissian

November 20th, 2014 at 10:13 AM ^

You know, I guess I just don't really care to get in the middle of a family squabble on the internet. It looks like his parents were in the wrong here, but this is a financial issue within the Johnson family. It sucks, but I guess I'm not going to pile on about the Johnson's family dynamics.

seegoblu

November 20th, 2014 at 11:19 AM ^

you're not getting "in the middle of a family squabble"...you're just a Michigan fan posting on a website commenting (or abstaining) on the breach of trust by a former Michigan athlete's family.

If you some how insert yourself into the bankruptcy proceedings or assist Jack in pursuing remedies against his parents for apparent fraud (or defending his parents against such claims)...then you're getting in the middle, no?

michgoblue

November 20th, 2014 at 7:26 AM ^

Serious question. Why is this a bad things to post. It relates to one of our former player, is pretty clearly labeled and is actually an interesting topic for disussion, specifically the financial woes of so many young, high-earning athletes. It is obviously not a happy post, but then again neither are most posts these days.

Don

November 20th, 2014 at 10:16 AM ^

Because Voltron is a troll who hates Michigan athletics. Like all trolls, he's childishly desperate for attention but the only method he can conceive of to get it is the online equivalent of reaching into his diaper and smearing poop on the wall and then waiting for the reaction. It's really sort of sad and pathetic, but the internet is a magnet for people like that.

Voltron is Handsome

November 20th, 2014 at 10:55 AM ^

So having differing opinions than many here is being a troll? That's news to me. I don't give a fuck about getting attention. You, however, clearly do, considering you call WTKA about 50 times a week and ALWAYS make sure to call when Brian is on so you can suck up to him.

BTW, I love Michigan football more than any sport/team. Basketball is my second most favorite, but not even close to the level of the football team.

MGoBrewMom

November 20th, 2014 at 9:41 PM ^

And I actually think on its own, it isn't a bad comment worth all the criticism. However, after his continuous trolling, I just made a suggestion. Why does a dude like that take the time to downvote everything and then come here and insert himself where he is clearly just being a jerk most of the time.

Maybe he would get happier if he got a hobby.

MichiganStudent

November 20th, 2014 at 8:15 AM ^

It absolutely should. Jack is a former player and a great one at that.



I'm not going to say this isn't hard to believe, but Jacks parents had been living vicariously through him for years and the finally took him for all he's worth.

Von Burgenstein

November 20th, 2014 at 6:56 AM ^

Yeah, if accurate, his parents are incredibly irresponsible and just flat out dumb.  Is it really that hard to be patient, collect your MASSIVE salary as it's paid to you, set aside 10-15% into something relatively safe and low yield and another 5-10% (especially when you're making THAT much) into something maybe a tad riskier and higher yield?  You know, for retirement?

Don't get me wrong, if I was making that much money, I'd chat with my dad about how to handle it.  But then again, he retired at a reasonable age because he was damn smart with his money and I'd trust him to advise me (not personally handle, that's stupid) with mine.

Not smart by Jack to give up a power of attorney to his parents on that one.  Even less smart for his parents to do that.  Also, I'm pretty sure that power of attorney didn't authorize them to willy nilly borrow huge sums of money and take enormous risks like that.  Breach of Duty of Loyalty... [insert other legal jargon here].

Monocle Smile

November 20th, 2014 at 10:24 AM ^

If I was hauling in far more than I needed and my parents were struggling, I'd be tempted to just let them control some of my money, because how much damage could they really do? Of course, this situation answers that rhetorical question in unfortunate fashion.

Granted, I probably wouldn't actually do it, especially not after this story, but I understand the line of thought.

robpollard

November 20th, 2014 at 7:10 AM ^

Why were his parents taking out these multi-million dollar loans at such high interest rates? It says they "traveled" a lot, including to Jack's games, but that couldn't have cost that much unless they were traveling first class every time, staying at the Four Seasons and ordering the lobster tail. Even then, there still seems to be millions unaccounted for. His parents really worked him over.

Sad situation, but brings home an important truth: if you're an adult, trust no one (not your spouse, parents, 'trusted advisor') to solely take care of your money. It's your money - you need to regularly check-in and be involved.

Mgotri

November 20th, 2014 at 7:47 AM ^

There are a lot of more expensive foods than lobster tail. Hell, lobster is $7/lb where I live. Most of the time it's not the food itself that makes it expensive, but the experience of eating at the particular restaurant which serves it. Much like staying at the four seasons vs a motel six. Both give you a bed, but only one gives you exquisite service



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robpollard

November 20th, 2014 at 9:32 AM ^

His contract was "monetized" for $15 mil (minuses taxes). Jack has (apparently) over $10 million in debts. If those assets were bought with his money, presumably they could be sold to cover the debts, in part, but it doesn't appear to be the case.

Perhaps his parents, beyond blowing it on travel and houses, just spent much of it on the interest for these loans.

I know, from the story, Jack doesn't want to criminally go after his parents but it's still going to get ugly for his family during the bankruptcy proceedings. Before all that debt is forgiven, a judge and the creditors are going to know what happened to the money that was lent.

 

gwkrlghl

November 20th, 2014 at 7:12 AM ^

Like Jack Johnson's dad who used to dance in the stands just a few years ago? Certainly changes my perspective on that guy. He and his wife appear to my collosal assholes. I hope they're selling off all that crap they purchased off Jack's money to help him out here...but somehow I doubt it

bj dickey

November 20th, 2014 at 7:52 AM ^

I feel bad for Jack. And not only did his parents take advantage of him, but so did a gentleman who was just elected to congress:

"The loan — which carried a 12 percent interest rate, almost three times the market rate — quickly went into default because it called for an initial payment of more than $1 million. (The contract extension Johnson signed with the Kings didn’t kick in until the following season, and he didn’t have that much in the bank.)
One day after the home loan was signed, on March 10, 2011, the Johnsons borrowed $2 million at an interest rate of 12 percent from a software developer in Iowa named Rodney L. Blum, who this month won a seat in the U.S. House. Blum’s office did not respond to interview requests left with Blum’s spokesman by The Dispatch. It’s unclear how Johnson’s family came to know him or why he was making a personal loan at a high interest rate."

What a hypocrite this guy is, who ran on conservative values, etc. I'd encourage you folks in Iowa to mAe this an issue next time around.

davidhm

November 20th, 2014 at 8:38 AM ^

Regarding this Blum guy:  was this loan 'personal' as in "no collateral" by the signee or was it 'personal' in that Blum loaned them his own money?  If it's the latter and the guy fronted them $2M of his own cash, then he's entitled to charge whatever interest the two parties agree to.  

Also, it appears this loan is non-secured, in which case 12% isn't that outlandish.  Go to the bank and try to get a "line of credit" loan, you are looking at rates from 9.5% to 13.5%.  

I think the bigger issue is why Jack's parents were borrowing this money, not the entity or person who was underwriting the loan.  

Timnotep

November 20th, 2014 at 10:34 AM ^

I once bought an old motorcycle, old enough that my bank didn't have it in their system, which meant that I couldn't use it as collateral and had to take a personal loan - my rate was 16.9%. It was a small loan so it really didn't matter, but my point is that personal loan rates are generally pretty high. This one is not on the congressman so much as it is on the Johnsons. It is absolutely sickening what they've done to their son.

KRK

November 20th, 2014 at 10:52 AM ^

That rate may seem normal for us in an unsecured loan but someone with Jack's financial standing at the time should have commanded a much lower rate. My hunch is he didn't know, the parents didn't care/understand and the guy saw dollar signs so he jacked up the rate knowing they'd never question it.




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FatGuyLittleCoat

November 20th, 2014 at 9:05 AM ^

Gave his mother a POA and then his parents went to town in his name. What a shame. Power of Attorney documents are incredibly powerful and here we can see the ill effects of somebody abusing their POA authority.

 

Oddly enough, Jack hasn't been playing very good hockey this season-I wonder if the stress of this has anything to do with it. Hopefully bankruptcy proceedings will clear this all up and he can move on with his life. This can't be much fun.

ypsituckyboy

November 20th, 2014 at 9:07 AM ^

I'd press charges against my parents if they did that to me. No question about it. People who steal like that will often continue to prey on others until they're caught.

Dad, if you're reading this, which you very well may be, I know you'd never do that so we both have nothing to worry about.