Mike Vick in bankruptcy court today

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AP

Lawyers are facing off today in a Virginia courtroom over the former Falcons quarterback’s plan to emerge from bankruptcy. Suspended Falcons quarterback Michael Vick is in federal court this morning, where teams of lawyers are facing off over his plan to emerge from bankruptcy.

The suspended NFL star’s plan partly depends on him rejoining the league. Vick, nearing the end of a 23-month federal prison sentence for his role in a dogfighting conspiracy, hopes to earn as much as $10 million a year or more, according to court filings in his bankruptcy case.

Under the plan he submitted to the court, Vick would keep the first $750,000 of his annual income over the next five years. After that, a percentage would go to his creditors based on a sliding scale.

Supporters of Vick’s plan include a committee of his unsecured creditors, including Radtke Sports, Royal Bank of Canada, Wachovia Bank and 1st Source Bank.

“The plan should be approved because it provides substantially all the benefits of the liquidation of Vick’s assets,” said Ross Reeves, one of the committee’s attorneys, “and offers the potential of recovering lots more money in the event Vick is able to rehabilitate his career and go back and play football.”

But an array of creditors and other parties have filed objections. Among them: the U.S. Labor Department, the Internal Revenue Service, the Virginia Department of Taxation and the regional U.S. trustee’s office.

In its complaint filed last month, the Labor Department accuses Vick of illegally spending about $1.3 million in pension plan funds for his own benefit, including paying his bankruptcy attorney and restitution ordered in his dogfighting case.

The complaint alleges Vick and others violated federal employee benefits law by making a series of transfers between March 2007 and July 2008 from a pension plan sponsored by his celebrity marketing company, MV7. The company sponsored a retirement plan for nine current and former employees. Vick failed to show his $1.3 million in debt to the plan in his bankruptcy filings, according to the complaint.

“This action sends a message that the Labor Department will not tolerate the misuse of plan money and will take whatever steps necessary to recover the assets owed to eligible workers,” Secretary of Labor Hilda L. Solis said in a statement issued last month.

On July 7, about seven months after he was sentenced to federal prison, Vick filed for Chapter 11 bankruptcy. He listed 30 creditors, including the Atlanta Falcons and the IRS. The largest of Vick’s creditors was Joel Enterprises, with a claim of $4.5 million. Andrew Joel, a Richmond sports agent, filed a lawsuit against Vick in 2006 claiming he reneged on an endorsement deal. As of December, Vick had $16 million in assets and $20.4 million in debts, court records show.

Vick’s plan calls for liquidating much of his assets — including boats, vehicles, horses and three pieces of real estate — to pay off liens and expenses. He plans to retain three vehicles, including a 2007 Land Rover, a Lincoln Navigator and a 2007 Infiniti truck; a home in Hampton, Va. for his mother, Brenda Boddie; a home under construction in Suffolk, Va., a defined pension plan; some clothing; and furniture.

Vick declared bankruptcy after pleading guilty to federal dogfighting charges, being suspended by the Atlanta Falcons and NFL and losing an endorsement contract with Nike. He has been forced to pay substantial legal fees and nearly $1 million in restitution to care for the dogs after his indictment, his court filings show.

“The announcement of his indictment ultimately led to a variety of harmful personal and financial repercussions” for Vick, says his bankruptcy plan. Vick’s “income dropped precipitously and he was forced to rely upon cash generated from some of his investments, his savings and the sale of certain of his assets to support himself and his family.”