Miami Scandal: Players Could Be Called To Court

Submitted by CRex on

So I found this to be rather interesting:

Under bankruptcy law, the trustee can seek to collect payments, cash and gifts such as jewelry and cars that Shapiro says he lavished on dozens of UM players in recent years.

Shapiro ran a 900+ million Ponzi scheme and currently owes 83 million in restitution. It also appears his victims could go after these players for the gifts he gave them or the value of the gifts and since many of those players now cash an NFL paycheck they'd have that money.

I found this interesting since normally the whole "player X took money" is settled as a he said/she said kind of thing. Often times the player is in the NFL and refuses to talk to the NCAA so nothing can really be proven (see the rumors of Holmes taking money). Here though this opens the door for sworn testimony in court as to the exchange of gifts and of course lawyers from the bankruptcy trust actively working to prove the players took gifts (so they can recover it).

If the courts are extracting sworn testimony out of people it could end up being used to nail Miami to the wall. Also might speed up the process. Lawyers going after millions of dollars tend to work faster than the NCAA does.

Edit:  The other thing to consider is say you're a former Miami player in the NFL and making 6 million a year.  Some lawyers come knocking on your door and go "Hey we can prove you took 100,000 in gifts from Shapiro and we can sue you to get it back."  Do you even lawyer up and waste time/money fighting something you have a good chance to lose?  Or do you just hand over the 100k in exchange for an agreement they'll never bother you again?  If players start doing the latter option that also bones Miami when they go in front of the committee.  

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brewandbluesaturdays

August 17th, 2011 at 4:39 PM ^

Attorney: "Hey, (insert indicted player here), we know maybe your NFL career didn't pan out. But you know that Shapiro guy that payed for your prostitutes and took you out on his yachts... Well the money he spent belonged to someone else, so yah the people he screwed want their money back. We calculated you owe us about , (x amounts of thousands of dollars), thanks and if you could get that to us ASAP, that'd be great..."

Miami Player: "....."

 

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CRex

August 17th, 2011 at 4:41 PM ^

I'd assume they'd just go after Wilfork, Hester, the estate of Sean Taylor, and others who could pay.  It's a waste of time and money to win a 200,000 dollar judgement against a guy who now moves furniture for a living.  He's never going to pay more than a few thousand.  We have a pretty big MGoLawyer community here though so  they probably can provide a definitive answer (hint hint guys).

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James Burrill Angell

August 17th, 2011 at 4:47 PM ^

I actually do this kind of thing and the bankruptcy Trustee could ABSOLUTELY go back after recipients of gifts to try to recover and it wouldn't shock me in the least to see it happen. Generally speaking though, they wouldn't need the testimony of the people they're chasing. They can use Shapiro's testimony to figure out who to target and then file motions against them. Testimony wouldn't be needed unless one of the players hired a lawyer to fight it. More often than not what happens is the person being pursued will talk to the Trustee and work soemthing out. Accordingly its unlikely any testimony that could be given to the NCAA will ever come to bear. Just some embarrassment for the former Miami players.

You're also 100% right that a Trusee won't bother pursuing someone who has no ability to pay.

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profitgoblue

August 17th, 2011 at 10:10 PM ^

All of my outside experience is in corporate reorganization cases and inside is in large secured and unsecured creditor matters but I've represented a few Trustees and I am pretty sure there is no way that any Trustee would go after these players. First off, the debtor would have had to list each of these transfers as assets of the estate in the proper section of the documents that get filed at the beginning of the case. Secondly, I'm pretty sure that the avoidance action that is involved is either bases in fraudulent transfer law (Sec. 546) or preference law (Sec. 547). As such, the farthest back the Trustee can look is 1 year from the bankruptcy filing date. As such, all the big ticket transfers to Taylor, Hester, and Wolfolk would be outside the avoidance powers of the Trustee. It's always funny to me when bankruptcy lawyers talk to the press like this small firm trustee counsel did. At big law firm we were taught from day 1 never to speak to the press. Look at the initial press articles on all the big bankruptcy filings the past few years and you'll see that the only quotes provided come directly from the court filings (public record) and never directly from an interview with a lawyer for the debtor. I would venture to guess that this lawyer for the debtor is more interested in getting his name out there than actually pursuing the actions because he should as a lawyer for the trustee. I've seen it many times and it always makes me laugh. That and the fact that, if he goes against wealthy NFL players, he'll be going against some big-time lawyers on the other side.

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superstringer

August 17th, 2011 at 5:48 PM ^

I would assume it will go a bit differently than described in the OP.

This is key:  apparently the creditors of the estate are owed $83M or so.  Thus they won't be chasing $1000 payments.  For creditors, that's a pittance -- if you're owed $1M, then a piece of $1K isn't meaningful.  Plus, the cost to the Trustee's lawyer of going after those payments will exceed the amount recovered.  (I assume the trustee is on a contingent fee basis? eat what you kill?)

The only way the trustee would go after a player is if the player was given a substantial sum of money that would be meaningful -- tens of thousands of dollars, or something.  That can't be many, if any, of the 72 players.

Moreover, if they approached an NFL player like Vilma, here's how the conversation goes:

Trustee:  "Give us back the $10K.  Fraudulent conveyance, etc.  We'll drag you to court, depose you, waste your time, etc."

Vilma:  "How about I give you $4K."

Trustee:  "Um, ok, deal."

That's how it normally works, these sorts of things get settled with the trustee and there's no depositions, etc.

So, don't hold out for depositions.

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profitgoblue

August 17th, 2011 at 10:03 PM ^

I would tell the Trustee to go F- himself, that my pockets are deeper than his and he can have fun wasting the estate's money and justifying it to the Court just to chase the value of the various gifts that I received. The Trustee would first have to be confident in the law, confident that the player received gifts (have to spend money on discovery), have to pay an expert to provide a valuation of the gift received (if not cash), and then fight things like personal jurisdiction and Title 28 challenges (amount in question has to exceed a certain amount). No way these actions are brought any further than a simple demand letter.

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Yeoman

August 18th, 2011 at 12:24 AM ^

Your client might want to respond to that demand letter with a settlement offer, preferring to part with a very small portion of his no-doubt considerable cash rather than suffer the damage to his reputation and his endorsement contracts that might follow from a public discussion and valuation of the various services he received.

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profitgoblue

August 18th, 2011 at 9:31 AM ^

That, of course, is how I always handle these things - try to bargain for the lowest amount possible without incurring outside counsel expenses.  That said, we're talking about individuals here that are going to be personally offended if a Trustee goes after them.  Once emotions get involved in these avoidance actions its all over - it gets ugly.  That's why I suspect that they will all band together and fight this hand and tooth.

 

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Sckon

August 17th, 2011 at 7:21 PM ^

is it only me, or does anyone else numb to the whole Miami thing anyway from previous years. They are not a top tier program anymore. If they got hit uber hard would anyone miss them? Miami fans wouldnt considering their game attendance.

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