Real Life ‘Jerry Maguire’ in Bankruptcy

At one point, Leigh Steinberg was probably the most famous agent in all of professional sports. He even served as the model for Tom Cruise’s character in the movie “Jerry Maguire.”

Unfortunately, as has happened to so many people, Steinberg fell on hard times. He made some bad investments, lost two homes to mold and went through an acrimonious divorce. Over time, parties gave way to habitual drinking, which then turned into full-scale alcoholism.

Now, Steinberg is two years sober and ready to get back on his feet. He has filed for Chapter 7 bankruptcy in an effort to get his financial affairs back in order.

Economically speaking, Steinberg is pretty far away from where he was when he was at the top of his game. His January 2012 bankruptcy filing listed very few assets – a car, a television, about $650 worth of personal effects and $100 in a checking account. By contrast, his debts total approximately $3.2 million.

If Steinberg’s bankruptcy goes well, these debts will all be discharged and he will be able to start over with a clean slate.

However, he faces one major hurdle involving a loan from a previous client. In 2003, one of Steinberg’s employees took a loan from an ex-client to fund a business venture in China. That business ultimately failed, and Steinberg agreed to pay a $900,000 settlement. He hasn’t been able to come up with the funds.

Normally, judgments are dischargeable in bankruptcy. However, since it is against professional ethics rules for NFL agents to solicit loans from clients, the ex-client’s lawyers say they plan to claim that the judgment represents “intentional misconduct.” If successful, the claim would mean that the judgment cannot be discharged in bankruptcy.

Source: Fortune Magazine, “Leigh Steinberg: They Showed Him the Money,” Daniel Roberts and Pablo S. Torre, April 11, 2012.

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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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