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Federal Judge Issues Order Protecting NFL Players’ Concussion Funds in Bankruptcy Proceedings

Official ball of the NFL football league. Dean Bertoncelj/Shutterstock.com

A new ruling in the Southern District of Florida has set a precedent for the legal classification of monetary awards in the National Football League's concussion litigation settlement.

On Tuesday, U.S. District Judge Kathleen Williams issued an order affirming a bankruptcy court's finding that funds from the NFL's settlement with players who sustained chronic traumatic encephalopathy injuries qualify as disability benefits.

The case, Salkin v. Williams, reached the federal court following an appeal from attorney Mark Bonacquisti, who represented the trustee looking to seize settlement money from former NFL player Darryl Williams.

Miami-born Williams had played for the Cincinnati Bengals as well as the Seattle Seahawks before retiring in 2001 after 10 seasons. When he filed for Chapter 7 bankruptcy in May 2016, he sought to keep his CTE-related funds exempt from seizures.

"The crux of appellant’s argument on appeal is that the failure of the NFL settlement to include the magic phrase 'disability policy' renders U.S. Bankruptcy Court Judge Olson’s reasoned decision overruling the trustee’s objection 'extreme,' 'remarkable' and clearly erroneous," the judge wrote in her summary.

But in the issue of first impression, the judge found the settlement is designed to provide financial relief to NFL players suffering from "qualified neuro-cognitive disabilities." Because recipients of the settlement "must qualify and submit to authorized medical testing from authorized providers," and any monetary award is subject to the severity of a player's condition, she concluded "the settlement only functions as a disability policy."

Fort Lauderdale attorney Chad Van Horn with Van Horn Law Group, P.A. Photo: Melanie Bell

Fort Lauderdale lawyer Chad Van Horn represented Williams in the bankruptcy proceedings. The attorney said the crux of their argument was that money from the concussion settlement was no different from other disability claims, meaning it'd be exempt property under Florida bankruptcy law.

"The underlying principle is that we want to take care of people when they’re sick," Van Horn said. "Once you experience CTE your health can decline rapidly, and you’ll need that money for your health care."

 Chad Van Horn
Chad Van Horn

Read the order:

As noted in Tuesday's order, the trustee sought Williams' CTE-related money by characterizing the award as a tort settlement. Bonacquisti, an attorney with the Plantation-based Salkin Law Firm, said "the trustee has no comment on the ruling at this time" in an email to the Daily Business Review.

According to the ruling, “The question of classification of such a settlement ... has not been addressed by the Eleventh Circuit, or upon an extensive search, by any other federal court.” Van Horn and his legal team reached the same conclusion.

"To my knowledge this is the first opinion on the matter," he said. "This is going to have a large impact on people, because there’s so many NFL players who’ve had CTE claims ... not only will the ruling benefit my client, we’re hopeful this will stand as precedent that anybody who has these injuries will be able to keep that money for a future case."

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