A federal judge from the Southern District of Florida has ruled that monetary awards from the NFL’s concussion litigation settlement are considered the same as disability benefits, and thus shielded from seizure in Chapter 7 bankruptcy cases.
The court took the case (Salkin v. Williams) after it was appealed from attorney Mark Bonacquisti, who represented the trustee looking to seize settlement money from former NFL player Darryl Williams.
Williams retired from the NFL in 2001 after 10 seasons. He filed for Chapter 7 bankruptcy in May 2016, and expected that his CTE-related funds would be exempt from seizure. That assumption found a receptive audience in U.S. Bankruptcy Court Judge Olson who agreed. The trustee appealed.
“The crux of appellant’s argument on appeal is that the failure of the NFL settlement to include the magic phrase ‘disability policy’ renders (Judge Olson’s) reasoned decision overruling the trustee’s objection ‘extreme,’ ‘remarkable’ and clearly erroneous,” the judge wrote in her summary. The argument lacked merit because the plaintiffs suffered from “qualified neuro-cognitive disabilities,” as determined by “authorized medical testing from authorized providers.”
Chad Van Horn, lead attorney for Williams in the case noted that “this was an attempt by a bankruptcy trustee to seize funds that we believed clearly were exempt and protected under bankruptcy law. These players, who literally have had their heads beaten in during the course of their careers, have the right to receive compensation for brain injuries as part of the NFL Concussion Settlement. Any effort to attach these funds for anything but the player’s future well-being is egregious and simply should not happen.”
He added that the case (CASE NO. 18-cv-61581-KMW) “will be foundational in protecting the settlement assets of other NFL players facing bankruptcy proceedings by establishing a firm precedent on their behalf. The Court ruled for the NFL player represented in this case because bankruptcy law stipulates that debtors have the right to receive ‘disability, illness or unemployment benefits.’ The court unequivocally categorized NFL Concussion Settlement funds as disability benefits.
“This ruling will have a major impact for retired NFL players.”