This is How You End up Broke


Jack Johnson of the Columbus Blue Jackets let his parents "manage" his affairs. Here's what they did to him:
Miller was the first lender, extending a $1.56 million loan on March 9, 2011, that Johnson’s parents used to buy the home in Manhattan Beach, a third of a mile from their son’s residence, while he played for the Kings.
Johnson, a source said, believed that his parents took out a mortgage using money left to them in the will of a relative who had recently died.
The loan — which carried a 12 percent interest rate, almost three times the market rate — quickly went into default because it called for an initial payment of more than $1 million. (The contract extension Johnson signed with the Kings didn’t kick in until the following season, and he didn’t have that much in the bank.)
One day after the home loan was signed, on March 10, 2011, the Johnsons borrowed $2 million at an interest rate of 12 percent from a software developer in Iowa named Rodney L. Blum, who this month won a seat in the U.S. House.
Blum’s office did not respond to interview requests left with Blum’s spokesman by The Dispatch. It’s unclear how Johnson’s family came to know him or why he was making a personal loan at a high interest rate.
Barely a month later, on April 14, 2011, the Johnsons borrowed $3 million — at 24 percent — from Pro Player Funding in upstate New York, a company that “monetized” several NFL players’ contracts during a work stoppage. Former NFL stars Vince Young, who went bankrupt, and Bryant McKinnie, who was sued for default, were among the company’s clients.
Johnson was sued by both Blum and Pro Player Funding within a month of the loans being signed. He signed settlements, according to court documents, without appearing in court to contest the lawsuits.
To settle Blum’s suit, Johnson had $41,800 — or 25 percent — garnisheed from his bimonthly Blue Jackets paychecks over much of the past two seasons.
The next two years brought additional loans and additional defaults, sources said, but the next loan that ended up in the court system was extended on Sept. 13, 2013: a $400,000 loan at 18 percent from EOT Advisors in Tarrant County, Texas.
They essentially used Johnson's future earnings as collateral and "monetized" his contract, which has bankrupted him. When you're borrowing money at an interest rate of 24%, you've essentially entered a financial zone reserved for Rent-a-Center customers and payday lenders. They could have each taken a million dollars and that would have left Johnson solvent and in great shape. Instead, they used a series of loan schemes to take everything this kid had, and then some.

In other words, a professional hockey player who signed a contract worth $30 million dollars in 2011 has about $50 grand in the bank, if that.

Johnson has severed himself from his family, by the way, and has no idea if his 16 year-old brother is being taken care of by his parents. Now that the gravy train has stopped, hopefully they've been able to get jobs and start paying back their son.

Yeah, right.