Jack Johnson is clearing up the financial nightmare his parents inflicted on him, but it will come at a steep cost.
Aaron Portzline of the Columbus Post-Dispatch reports Johnson has reached a $9 million+ settlement with creditors after filing for bankruptcy protection. Johnson’s parents used granted power of attorney to take out high-interest loans under his name and put him in a mountain of debt. It was a scummy situation, but Johnson appears to be resolving it best he can.
Portzline reports Johnson has liquidated two homes and a $125,000 Ferrari in an effort to pay back creditors. Johnson will reportedly turn over a majority of his $5 million salary for both of the next two seasons to settle with creditors. Factoring in the payments to creditors, Johnson will be the NHL’s lowest-paid player. Here’s how his salary will work.
“Johnson will keep $246,000 for “living expenses” each of the next two seasons. In the following three seasons, he’ll get to keep $277,050.50 per season until all his creditors are satisfied.”
“In addition, the four creditors will get 10 percent of Johnson’s future earnings if he signs a new NHL contract in 2018 that exceeds $4.5 million total over a three-year term, a virtual certainty given his age and status in the game. The defenseman’s current deal with the Blue Jackets ends after the 2017-18 season.”
Johnson still hasn’t settled with two separate creditors in which he owes $2 million.
Johnson’s debt is a lesson in athletes handing over power of attorney to parents. In his case, his parents pillaged his earnings and left him with crippling financial debt. Thankfully, Johnson should be able to pay of his debts eventually, but, at a severe financial cost.
