by Karen Brune Mathis
Managing Editor
Former Jacksonville Jaguars star quarterback Mark Brunell’s football career may well be over, according to his bankruptcy reorganization plan.
“It is possible that the 2010-11 season may have been his last,” says a disclosure statement filed Monday with Brunell’s debtor’s plan of reorganization.
Brunell, 40, owns a home in Ponte Vedra Beach. He filed for protection under Chapter 11 on June 25 in U.S. Bankruptcy Court in Jacksonville, listing assets of $5.5 million and liabilities of $24.7 million.
The statement said that because of the uncertainty of Brunell’s National Football League career, he “believes at this point that his future income can only be predicted to be $5,000 per month.”
As a result, it said, over the next few years, there will be a period when Brunell’s expenses exceed his income.
Brunell’s bankruptcy lawyer, Robert Wilcox with Brennan, Manna & Diamond, did not respond to requests for comment.
The majority of Brunell’s liabilities were related to real estate and business investments and Brunell’s personal guarantee on real estate debt, including debt incurred with partnerships that involved former Jaguars teammates Joel Smeenge and Todd Fordham.
The disclosure statement said the reorganization plan provides for payment to claims of creditors in “varying percentages based upon the priorities applicable to each such claim.”
The statement said the “vast majority” of Brunell’s debts relate to business debts incurred in connection with Champion LLC, a failed real estate development and holding company, and with entities that owned several Whataburger franchises.
“It is the failure of those business enterprises and Mr. Brunell’s guarantees of many of their financial and contractual obligations that caused Mr. Brunell’s financial problems,” said the statement.
Brunell proposes to convey his remaining restaurant interests to another investor.
A series of actions are required to confirm the reorganization plan, including a vote by creditors and approval by the bankruptcy court.
The documents show the actual filed allowable claims against Brunell were $7.44 million, although the final amount is subject to change.
Brunell proposes to pay some of his unsecured creditors from the sale of certain available assets, which he estimates have a total gross liquidation value of almost $369,000.
Brunell wants to buy some of those personal items and use the proceeds to pay creditors.
He wants to purchase, at their appraised replacement value, his 2010 Super Bowl ring, three Rose Bowl rings, his 1991 national college championship ring and two watches, valued at $15,500.
He also would buy miscellaneous helmets and jerseys, memorabilia and shotguns with an estimated value of $800.
According to the plan, Brunell will pay in full some of his secured debts, including the loan on his Ponte Vedra home.
A list of 12 classes of creditors range from Class 1, which is the loan on his homestead, to Class 12, which are unsecured claims of less than $500.
Brunell’s plan lists his proposals on how to treat each class.
Brunell will file a motion seeking conditional approval of the disclosure statement, which is up to final approval by the court.
The case is assigned to U.S. Bankruptcy Judge Jerry Funk.
A hearing will be set to approve the statement and confirm the plan.
The disclosure statement summarized that Brunell is a professional football player who played for the New York Jets in the 2010-11 season and has been a professional football player since 1993.
His experience includes the Green Bay Packers, the Jaguars, the Washington Redskins, the New Orleans Saints and the Jets. “He has not been a starting quarterback in several years,” said the disclosure statement.
When Brunell filed for Chapter 11 in June, he had not signed a contract with the Jets. In August, he signed a contract for the 2010 and 2011 seasons, but only the 2010-11 season was guaranteed, it said.
Brunell “has no legal or contractual ability to require the Jets to honor the second year of the Jets contract,” it said.
Brunell can be released and is “free to pursue employment with any NFL team or outside the NFL,” said the statement.
In addition, the Jets contract was subject to the collective bargaining agreement between the NFL and the NFL Players Association, which expired March 11.
As of March 31, negotiations for a new collective bargaining agreement for the 2011 season had failed and the players association “has ‘decertified’ and a ‘lockout’ of the players is in place,” said the statement.
“As a result, it appears that Mr. Brunell’s Jets contract does not currently have any legal effect,” said the statement.
Brunell, who is married with four children, is a Los Angeles native and was a quarterback at the University of Washington.
He was drafted by the Green Bay Packers in 1993 and spent two years with the team before being traded to the Jaguars before the 1995 inaugural season.
Brunell quickly became a respected team and community leader. He was widely regarded for his actions on and off the field, including creating the Mark Brunell Family Foundation to benefit critically ill children and their families.
In fact, his foundation plans a fundraiser this month in Ponte Vedra. Events are scheduled April 16-18 to raise money for local children.
Brunell was traded to the Redskins in 2004 and played for four seasons, then joined the Saints in 2008 for two seasons. He won the Super Bowl ring with the Saints in 2010.
He signed with the Jets after he filed for Chapter 11 reorganization.
Chapter 11 typically is used by corporations, although individuals with higher levels of assets and liabilities may file under the chapter.
Before he filed the petition, Brunell issued a statement through attorney Michael Freed of Brennan, Manna & Diamond about the debts and his decision to seek bankruptcy protection.
“After much deliberation and many years of shouldering an enormous amount of debt resulting from passive real estate investments, it has become clear that this is the only viable course of action,” said Brunell.
He said he had been a silent partner of a group of friends engaged in real estate development with investments in Florida and elsewhere.
“The timing of the group’s real estate acquisitions at the height of the real estate market, in hindsight, clearly was not good, particularly given the subsequent collapse of the economy,” he said.
Brunell said he personally made loan payments “in good faith for several years as we worked hard to find buyers, partners or refinancing.
“In the end, we couldn’t and I am no longer able to shoulder this burden.”
According to the Chapter 11 filing, Brunell’s assets include real and personal property, such as his Ponte Vedra Beach home valued at $3.1 million.
Personal property includes checking and savings accounts, furniture, clothing, vehicles, an NFL Player 401(k) plan and belongings that included the rings.
Under Florida law, his home, furnishings and some accounts are exempt from claims from creditors.
Chapter 11 of the U.S. Bankruptcy Code is designed to allow debtors to reorganize debts under the protection of the court.
It provides for an automatic stay in which judgments, collection activities, foreclosures and property repossessions are suspended and cannot be pursued by creditors on any claim arising before the filing of the petition, according to court information.
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