Across a 17-year career in the National Hockey League, where he has played for several
teams including the Columbus Blue Jackets, Los Angeles Kings, and New York Rangers, Jack
Johnson made a name for himself as a star player on the ice. 1 Johnson has scored 73 goals and
contributed with 246 assists through 1099 games played. 2 In 2022, he accomplished the ultimate
feat for any hockey player and won the Stanley Cup, the championship in the NHL, as a member
of the Colorado Avalanche. 3 However, before he reached the peak of any hockey player’s career,
and like every other sports entity mentioned in this paper, Johnson found himself in financial
hardship and filed for bankruptcy in 2014. 4 In Johnson’s case, he filed as an individual Chapter
11 debtor and had to go through the struggles of a bankruptcy case. 5
Section 552(a) of the Bankruptcy Code provides that “property acquired by the estate or
by the debtor after the commencement of the case is not subject to any lien resulting from any
security agreement entered into by the debtor before the commencement of the case.” 6 To avoid
application of § 552(a), RFF argued that Johnson earned his payments before the commencement
of the bankruptcy case “merely by virtue of being employed by the Blue Jackets, whether he
played or not.” 7 However, the court returned to the conclusion that Johnson earned his salary as
he played hockey and performed his obligations under the player contract, not at the moment of
the contract’s signing. 8 Importantly, the court quoted the 2 nd Circuit’s conclusion in US v. Long
Island Drug Co., to note that “future earnings are contingent upon performance of a contract of
1 https://www.hockey-reference.com/players/j/johnsja02.html
2 Id.
3 Id.
4 In re Johnson, 554 B.R. 448, 452 (Bankr. S.D. Ohio 2016), aff'd, 16-8035, 2017 WL 2399453 (Bankr. App. 6th Cir.
June 2, 2017).
5 Id.
6 11 U.S.C. § 552(a).
7 In re Johnson, 554 B.R. 461, quoting Resp. at 19.
8 Id.
service and represent no existing rights of property.” 9 For additional insight on the complicated
bankruptcy issues brought in this case and how they translate to the sports context, the In re
Johnson court found confirmation of its similarities in In re Clark, which involved NFL player
Bruce Clark and the salary that he had not already been earned and was receiving after filing for
bankruptcy. 10 The In re Clark court noted that he “could not refuse to abide by team and League
rules,” and that he “was hired to play football” and “could not refuse to play ball.” 11 As a result,
the district court held that Clark had not yet earned the salary he was receiving when he began
his bankruptcy case. 12 Using these prior cases allowed the In re Clark court to find confidence in
its ruling. In doing so, In re Johnson highlighted prior decisions of the Supreme Court that have
held that the allowing the assignment of future/unearned wages to survive bankruptcy would be
destructive of this essential purpose and benefit of bankruptcy. 13
Offering debtors a “fresh start” or “clean slate” is one of the primary purposes of the
Bankruptcy Code. 14 The court further stated that there is nothing in the Bankruptcy Code that
suggests the notion that assignments of future earnings could create a lien that could withstand
bankruptcy. 15 The court decided to interpret § 552(a) as specifically stating that any property
acquired by either the estate or the debtor after the commencement of bankruptcy cases is not
subject to liens resulting from a security agreement entered into by the debtor before the filing of
bankruptcy. 16 Because the post-petition payments were properly classified as earnings from
services he performed after the filing for Chapter 11, Johnson’s bankruptcy estate “acquired”
them after the commencement of his case and § 552(a) would apply. 17 The court concluded that
9 United States v. Long Island Drug Co., 115 F.2d 983, 986 (2d Cir.1940).
10 In re Clark, 100 B.R. 319-20 (E.D.La.1989), aff’d, 891 F.2d 111 (5th Cir.1989).
11 Id.
12 In re Johnson, 554 B.R. 459.
13 Loc. Loan Co. v. Hunt, 292 U.S. 234, 245 (1934).
14 In re Johnson, 554 B.R 462.
15 Id.
16 Id.
proper interpretation of § 552(a) should be that it “terminates security interests in and
assignments of post-petition salary and wages in reorganization cases just as it does in other
cases under which individuals may file for bankruptcy.” 18 As a result, the bankruptcy judge sided
with Johnson and granted the motion, referencing Justice Souter’s belief that the “policies of
obtaining a maximum and equitable distribution for creditors and ensuring a fresh start for
individual debtors … are at the core of federal bankruptcy law.” 19
17 Id. at 461-62.
18 Id. at 463.
19 Id. at 462, quoting BFP v. ADR Tr. Corp., 511 U.S. 531 (1994), dissent J. Souter.
