The Electric Commentary

Thursday, October 07, 2004

Pot leads to bankruptcy for former NFL player

This headline sounds like a public service announcement using a washed up former athlete who mismanaged his life by sitting around and rolling doobies as an example. In fact, it refers to Ricky Williams' plan to use bankruptcy protection to get out of his current contract with the Dolphins and resign with another team (Raiders). Will this work? Todd Zywicki thinks so:

Is bankruptcy Ricky's answer? Probably yes. First, he could use bankruptcy to probably get out of the remainder of his contract with the Dolphins and put himself up for bid as a free agent. Second, he could dishcharge the $8.6 million obligation as a claim in the case.
Moreover, Ricky could probably still live pretty large in bankruptcy. Assuming he lives in Florida now that he plays for the Dolphins, and assuming he lives like a usual athlete, his house is probably pretty darn nice (usually in the several million dollar range). Because of Florida's unlimited homestead exemption, however, he would be entitled to keep his house in bankruptcy.

A few southern states offer unlimited homestead exemptions as a means to attract rich people. It is a fact of life that MTV Cribs would not be nearly as interesting without the homestead exemption as it encourages people to build up their houses as much as possible. In general, this is a good thing, but in states like Florida, it is ridiculous. The whole point of the exemption is to allow poor, down-on-their-luck people to keep their houses in the unfortunate event of a bankruptcy, not as a shelter for irresponsible athletes. But this is what Florida has asked for, and this is what it gets.

By the way, if you're feeling smug because you drafted Ricky in the late rounds, just remember a few things.

1. Unless you are in a keeper league, Ricky will probably just eat up a roster spot for the rest of the year.

2. Remember that filing bankruptcy can take a while. Especially if you're clearly abusing it.

3. Even if he does manage to make his contract disappear, he still faces a suspension from the league for violating the substance abuse policy.

Would you want Ricky on your team at this point? Isn't he just a disaster waiting to happen? I mean, what if he fogets to take his "urine luck" some week?



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