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Players Now Know What to Expect From XFL Bankruptcy Case

When the XFL filed for Chapter 11 bankruptcy in April of 2020, no one affiliated with the league had any idea what would come of it.

Slowly, we learned through the court filings what groups were submitting claims.

Many players were left off the list, because they weren’t rightfully notified about the “bar date”, which is the last day a claim could be submitted. Thanks to the hard work of Kenneth Farrow, Nick Temple, and everyone else at the UFPA, players were granted an extension to file their claims.

Initially the players filed as priority claims. This has been disputed in court, and the Plan Administrator – someone hired by the Debtor, in this case, Vince McMahon, to handle everything, after the proposed final order has been accepted – has determined that the players’ claims do not represent a priority claim.

If you’re asking what would give a claim priority status, salaries owed to people that were NOT paid within the last 180 days before filing Chapter 11. Because the league says everyone was paid up to the final week of the contract, the claim cannot be issued priority status.

Within the filing, and the order to reclassify each claim is the explanation of the court:

The Debtor paid all wages, salaries, or
commissions earned within 180 days before the
Petition Date. Therefore, the claimant is not
entitled to priority under section 507(a)(4) of
the Bankruptcy Code, and the claim should be
reclassified as a general unsecured claim.

Docket File Number 669 Schedule 1

We have the filing available here for you to read, in case there are any other questions.

We learned in November how the Plan would be handled, who the secured claimants were, and how unsecured claims were going to be handled. Although the players did attempt to file as a priority claim – which takes precedent over unsecured claimants – the Administrator determined that all eligible salaries had been paid. In which case, due to bankruptcy law, the claims are reclassed as general unsecured claims, as was stated earlier.

here is a photo of the breakdown of compensation depending on the type of claim:

Because the players’ contracts were rejected on the first day of filing, they are entitled to “rejection damages”. The Plan Administrator has determined that those damages equal seven weeks of base pay, which is $1,040, according to the player contract that is within the linked above court filing.

Now that the claims have been reclassed, and determined to be due a total of $7,280, the above notice comes into play. You can see that in November it was found that each unsecured claim would receive between 8%-12% of their initial claim. That’s every unsecured claimant.

The above photo is the Analysis that was ran to determine whether a Chapter 7 – total liquidation – would have benefitted the unsecured claimants, and as you can see, they had already found that total claims were around $45 million, but the total distributions were around 10% of that.

In December, the Committee of Unsecured Creditors voted to accept these terms.

Recently, the UFPA sent out a letter to players updating them on the status of their claims. Of course they were hoping to get 100% of their claim, as they would be entitled to IF they were a priority claim. But being that the league has always stated that they had already paid their players the base salary, the players weren’t owed salary money, but were owed rejection damages because their contracts were rejected.

That took them from being a priority claim, to a general unsecured claim, and those will get around 10% of their total amount.

Is it fair? No. But it’s bankruptcy. Nothing about this is new, happens every time a business claims Chapter 11. None of their creditors get all the money they’re owed. Farrow says that the players were not paid in full, but the league says otherwise, and the Plan Administrator has seen the books, and agrees.

None of this has anything to do with the new XFL, owned by Dany Garcia, Dwayne Johnson, and RedBird Capital in any way. Even though the sale did happen in the middle of the proceedings, none of the debt, or litigation falls on their shoulders.

This is still an ongoing situation, and when we have more information for you, we’ll release it.

For the Love of Football


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Content creator, that lives in Virginia Beach. Father of 3 amazing girls, lover of all things football. Trying to add my voice to the mix. #ForTheLoveOfFootball #SilenceIsNotAnOption

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