Dead Spin – If you haven’t yet read the Columbus Dispatch article on Blue Jackets defenseman Jack Johnson, do so. It’s an insane (but not uncommon) story about how a pro athlete, who signed a $30.5 million contract in 2011, ends up filing for bankruptcy.
In 2008, Johnson fired his agent. When Johnson signed that seven-year contract in 2011, he also gave his mother, Tina Johnson, control over his finances. Tina ended up borrowing approximately $15 million against Johnson’s future earnings, according to the Dispatch. (The practice of “monetizing” a contract is discouraged, as it usually leads to an increasing hole of debt.)
There’s more, involving Johnson’s father, Jack Johnson, Sr.:
Because Johnson’s name is on the loans, he has been sued at least three times for more than $6 million for defaulting, as in the case of the mortgage on a house in Manhattan Beach, Calif. In court documents, Johnson says his parents bought the house with his money but without his knowledge.Johnson’s parents allegedly each bought a car, spent more than $800,000 on upgrades to the Manhattan Beach property and traveled, often to see him play NHL games for the Kings and Blue Jackets.”Jack would ask (his parents) questions: ‘What’s this? What are these guys calling about?’ ” a source said. “And they would tell him not to worry about it, just worry about playing hockey.”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.”
A few of the loans are listed in the piece, and they all have impossibly high interest rates, such as one $3 million loan with a 24 percent interest rate. Johnson’s taking the matter to court in an attempt to recoup what he can.
Johnson filed for bankruptcy, declaring assets of less than $50,000. He has reportedly stopped talking to his family.
Now, we want to hear from you! Would like to share your opinion or make a comment on the Unlock Your Wealth Radio Show? If so, then please leave your comment or questions in the space provided below and share this article with your friends and family on Facebook and Twitter. Your comments or question could be chosen as our featured Money Question Monday and a phone call by financial expert Heather Wagenhals could dial your way to be live on the Unlock Your Wealth Radio Show.