Why Did Jack Johnson File For Bankruptcy?

Parents Force Blue Jackets Defenseman To File For Bankruptcy

Now this is a crazy story…

Jack Johnson, who plays for the Columbus Blue Jackets had to file for bankruptcy last year.

The craziest part of this story is that it was totally his own PARENTS fault and he had no idea they were spending millions of his own dollars.

Read Through The Article Below To Get The Whole Story:

On the morning of Oct. 7, two days before the Blue Jackets opened the 2014-15 season, Jack Johnson left his Ferrari parked in the garage of his Dublin apartment and drove his BMW to a federal courthouse Downtown to file for bankruptcy.

Johnson has earned more than $18 million during his nine-year NHL career.

Almost all of the money is gone, and some of his future earnings have already been promised — which is why Johnson, surrounded by a new team of financial advisers and an attorney, signed his financial surrender.

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. “I’ve got people in place who are going to fix everything now. It’s something I should have done a long time ago.”

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.

In 2011, in the weeks leading up to Johnson’s first big contract — a seven-year, $30.5 million deal signed with the Los Angeles Kings, under which he now plays for the Blue Jackets — Johnson signed a power of attorney that granted his mother full control of his finances.

Tina Johnson borrowed at least $15 million in her son’s name against his future earnings, sources told The Dispatch, taking out a series of high-interest loans — perhaps as many as 18 — from nonconventional lenders that resulted in a series of defaults.

“These were his parents, right? He trusted them. It wasn’t until last spring or early summer that he understood there was a significant problem.”

In his bankruptcy filing, Johnson claims assets of “less than $50,000” and debts of “more than $10 million,” although sources say the debt could be in the neighborhood of $15 million.

Johnson has cut off all contact with his family, a source said.

Johnson’s paychecks from the Blue Jackets have been garnisheed to the point where, at the end of last season, “His paychecks were gone before he even got them,” a source said.

“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.”

“Intended or unintended, there are cases where there is a sense of entitlement among the parents of pro athletes,” said Gary Marcinick, a partner at Columbus-based Budros Ruhlin & Roe, a fee-only wealth-management firm. “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.”

But, he said, the idea of a player being unaware that he is millions of dollars in debt is both hard to fathom and entirely believable. “It is plausible; I’ve seen it,” Marcinick said. “These players are so young, and they have a lot of money coming in — so they’re targets. They rely blindly, often, on the judgment of their parents or agents, and they sometimes have agendas that are not optimal.

Those close to him say Johnson is pretty frugal. The Ferrari, which likely will be a casualty of the bankruptcy, was the one “extravagant” gift he bought for himself upon turning pro, a source said.

Two sources close to Johnson say he is confused and hurt and is concerned about the well-being of his 16-year-old brother, who lives with his parents in Michigan. But Johnson, sources told The Dispatch, doesn’t want to pursue criminal charges against his parents, who aren’t named in his suit.

John Davidson, the Blue Jackets’ president of hockey operations, would not comment publicly but did say the club is aware of Johnson’s situation and is “standing beside him.”

The NHL would not comment on Johnson’s situation. The NHL players’ association certifies players’ agents but has opted not to certify financial planners, according to a spokesman.

Source: Blue Jackets Xtra